New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    A firm raises Rs.10,00,000 by issuing common equity.

    Which of the following financial statements will reflect the transactions?
    A Income statement and statement of owners’ equity Correct Answer Incorrect Answer
    B Balance sheet, income statement, and cash flow statement Correct Answer Incorrect Answer
    C Balance sheet, cash flow statement, statement of owners’ equity Correct Answer Incorrect Answer
    D Balance sheet and Income statement Correct Answer Incorrect Answer
    E Income statement and Cashflow Statement Correct Answer Incorrect Answer

    Solution

    The Rs.10,00,000-capital raised will appear in cash flow statements as a cash flow from financing activity. It will also appear as a contributed capital in owners’ equity. Both assets (cash) and equity (liabilities side of the balance sheet) increase in the balance sheet. The income statement is unaffected by these transactions

    Practice Next