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    Question

    From the below mentioned activities, which will NOT

    result in decrease in cash in hand of the firm? i. Fixed assets increased ii. Increase account receivable iii. Increase notes payable iv Advance payment for electricity bill
    A Only i Correct Answer Incorrect Answer
    B Only ii Correct Answer Incorrect Answer
    C Only iii Correct Answer Incorrect Answer
    D Only iv Correct Answer Incorrect Answer
    E Only i and iv Correct Answer Incorrect Answer

    Solution

    Impact of the following activities on cash in hand- Increase in fixed assets – decrease in cash as cash will be used for buying fixed assets Increase account receivable – Account receivable means, cash to be received in future, increase in it will decrease the present cash in hand Increase notes payable – Increase in cash Advance payment for any expense – reduce the cash in hand

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