During the year, a company received Rs. 30,000 cash from the sale of a used office chair. Under the cash flow statement, this cash inflow should be classified under which activity?
Answer
Investing
The correct answer is Investing — Cash received from the sale of a non‑current asset is recorded under investing activities.
Step-by-step solution
- Identify the nature of the asset sold – a non‑current asset (office chair).
- Cash received from the sale of a non‑current asset is recorded under investing activities.
Common mistake: Treating the inflow as operating activity
Concept tested: Classification of cash flow activities
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