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    • Question

      The sale of an old vehicle for ₹2,00,000 (book value

      ₹2,50,000) will be reported in the cash flow statement as:
      A ₹2,50,000 outflow investing activities Correct Answer Incorrect Answer
      B ₹2,00,000 inflow investing activities Correct Answer Incorrect Answer
      C ₹2,50,000 inflow investing activities Correct Answer Incorrect Answer
      D ₹2,00,000 inflow operating activities Correct Answer Incorrect Answer
      E No cash flow effect Correct Answer Incorrect Answer

      Solution

      Cash received on sale of fixed asset is inflow under investing activities, regardless of book value or gain/loss.

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