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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Cash Flows- Acq of a Sub
Dear Tutor,
Thanks for the amazing classes!
I was wondering, when drawing the T accounts for the PPE…
Opening balance is a debit (ok since PPE is an Asset account)
Acq of a Sub is a debit (ok again because I increase my asset side)
Then, the balancing figure is an outflow of cash… so I debit? Why so?
My rationale says to actually credit the Bank, since it is an outflow!
Help me build the correct rationale behind that..!
I look forward to your reply.
Regards,
R.
Hi,
Thanks for the kind comment, it’s much appreciated.
It is an outflow of cash as when you CR Bank you are then DR PPE. The DR is the balancing figure and so this must represent a cash outflow as the CR entry is the cash outflow.
Hope that helps.
Thanks