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    • Question

      ABC Ltd. issues debentures worth ₹5 lakh and uses ₹3

      lakh of it to purchase fixed assets. What is the net effect on funds from operations in the fund flow statement?
      A Increase by ₹5 lakh Correct Answer Incorrect Answer
      B Decrease by ₹3 lakh Correct Answer Incorrect Answer
      C Increase by ₹2 lakh Correct Answer Incorrect Answer
      D No effect Correct Answer Incorrect Answer

      Solution

      Raising funds = inflow Asset purchase = outflow Net = ₹5 lakh – ₹3 lakh = ₹2 lakh net inflow

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