Step 1: Understanding the Concept:
A Cash Flow Statement aims to highlight net changes in a firm's liquidity position by breaking movements down into operating, investing, and financing pillars. Crucially, the statement tracks changes in the aggregate pool of Cash and Cash Equivalents (CCE). According to Accounting Standard-3 (or IAS 7), "Cash" includes cash on hand, while "Cash Equivalents" include highly liquid bank accounts and short-term deposits. Moving money within the same liquid pool does not alter the total balance of available funds.
Step 2: Detailed Explanation:
Let's evaluate what happens physically during a cash deposit transaction:
1. When a business takes physical paper cash from its office locker and deposits it into its corporate bank current account, two accounts are affected: the Cash Account decreases, and the Bank Account increases by an identical amount.
2. Under accounting rules, both physical currency in the vault and deposits sitting in a current bank account are components of the same single asset class: Cash and Cash Equivalents.
3. Because the transaction merely shifts funds from one pocket of cash equivalents to another, the net movement of total liquid funds is zero. There is no actual inflow or outflow of wealth from outside the company's cash pool.
Since cash flow statements only display transactions that alter the overall balance of cash and equivalents, a routine bank deposit is classified as a mere management movement and is not shown in the Cash Flow Statement as a separate activity entry. This corresponds to option (D).
Step 3: Final Answer:
Cash deposited into a bank is not shown in the Cash Flow Statement.