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State whether following statement is true or false : Purchase of fixed asset is operating cash flow. - Book Keeping and Accountancy

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Question

State whether following statement is true or false :

Purchase of fixed asset is operating cash flow.

Options

  • True

  • False

MCQ
True or False

Solution

False

Explanation: Purchase of fixed asset is an investing cost for the business. Therefore, it is an investing cash outflow for the business. On the other hand, operating cash flow consists of those activities of business that are related to the operations of the business.

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Cash Flow Analysis
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Chapter 12: Analysis of Financial Statements - Exercise 1 [Page 384]

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Micheal Vaz Book Keeping and Accountancy [English] 12 Standard HSC Maharashtra State Board
Chapter 12 Analysis of Financial Statements
Exercise 1 | Q 3 | Page 384
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