Question

state whether cash deposited in bank will result inflow,outflow or noflow of cash and why?

Answer 1

it is a contra entry and leads to outflow of cash in hand and inflow of cash at bank since cash is going and coming respectively

Answer 2

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Above answer is absolutely correct.

KnOw more :-

CASH IN FLOW

• It means that cash is going into the company.
• E.g : Receipt of a bank loan, Interest on savings and Investments and Shareholder investments etc

CASH OUT FLOW

• It means cash is going out of the company.
• E.g: Purchase of stock, Raw materials or tools, Wages, Rents and Daily operating expenses, Dividend payments, Income tax etc