Question : For calculating 'cash flow from operating activities' from the given figure of 'Net Profit' earned during a year, how would you deal with if Decrease in Inventory?
Option 1: Added
Option 2: Deducted
Option 3: Both A and B
Option 4: None of the above
Correct Answer: Added
Solution : Answer = Added
When calculating cash flow from operating activities, a decrease in inventory would be added to the net profit. This adjustment accounts for the fact that the decrease in inventory represents cash that was used to purchase goods, which is an operating activity and should be added back to the net profit. Hence, the correct option is 1.
Question : For calculating 'cash flow from operating activities' from the given figure of 'Net Profit' earned during a year, how would you deal with, if decrease in Bills Payable,
Question : For calculating 'cash flow from operating activities' from the given figure of 'Net Profit' earned during a year, how would you deal with, if increase in Trade Payables
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