Calculate the resulting cash flow and state the nature of cash flow from the following information: Acquired machinery for 3,50,000 by issuing cheque.

The correct option is Investing activity and outflow 3,50,000.

Here is the step-by-step logical breakdown of the solution:

1. Identifying the Nature of the Activity:
In accounting, cash flows are classified into three main categories: Operating, Investing, and Financing activities.
* Investing Activities involve the acquisition and disposal of long-term assets (non-current assets) and other investments not included in cash equivalents.
* Machinery is a tangible fixed asset (a non-current asset). Therefore, the acquisition (buying) of machinery falls under Investing Activities.

2. Determining the Direction of Cash Flow (Inflow vs. Outflow):
* Since the machinery is acquired (purchased), the business must pay for it.
* The payment is made by issuing a cheque, which directly reduces the cash and bank balance of the business.
* Because cash/bank balance is leaving the business, this transaction represents a cash outflow.

3. Calculating the Amount:
* The value of the machinery acquired is 3,50,000.
* Therefore, the magnitude of the cash outflow is 3,50,000.

Conclusion:
Combining the points above, the transaction is classified as an Investing activity resulting in a cash outflow of 3,50,000.