Which of the following are cases of Funds Flow? A. Payment of trade creditors by sale of Land B. Cash…

In a Funds Flow Statement, a flow of funds (change in net working capital) occurs only when a transaction simultaneously involves one current account (working capital item) and one non-current account (fixed asset, long-term liability, or capital). This holds for: (A) Payment of trade creditors (current) by sale of Land (non-current), (C) Purchase of Furniture (non-current) by issue of bills payable (current), and (D) Payment of long-term loan (non-current) by cash (current), i.e., A, C & D only. Cash collection from debtors (B) and paying bills payable by cash (E) involve two current accounts and do not alter net working capital.