Question:
What will be the effect of ‘Purchase of Marketable Securities for Cash’ on Cash Flow Statement?
What will be the effect of ‘Purchase of Marketable Securities for Cash’ on Cash Flow Statement?
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Transactions involving reclassification between cash and other assets, without impacting total cash flow, typically do not affect the cash flow statement.
Updated On: Jan 27, 2025
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Solution and Explanation
The purchase of marketable securities for cash does not change the overall cash position as it involves a transfer between cash and another short-term asset. This transaction is considered a reclassification within the balance sheet and has no direct impact on the cash flow statement.
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