If a company has both an inflow and outflow of cash related to property, plant, and equipment, the ______________ in the investing activities section.

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22-08-2022
Business

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If a company has both an inflow and outflow of cash related to property, plant, and equipment, the ______________ in the investing activities section.

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smecloudbird18 smecloudbird18 · Answer 1 · 2022-08-29T19:03:09+02:00

The cash inflow and cash outflow must be reported separately in the investing activities section. Money coming into a business is known as cash inflow, and it may come through sales, investments, or financing. The reverse of a cash outflow is a cash inflow, which is money entering a business.

In other words, for a business to be financially viable over the long run, there must be more operating cash inflow than operating cash outflows. Cash from sales is subtracted from cash paid for operational expenses during the time period to determine operating cash flow. Purchases, loan repayment, business expansion, paying salaries.

To learn more about cash inflow, click here.

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