Question : To Calculate Cash Flow Operating Activities, which of the following will be deducted?
Option 1: Increase in Trade Payables
Option 2: Decrease in Trade Payables
Option 3: Decrease in Inventories
Option 4: Decrease in Trade Receivables
Correct Answer: Decrease in Trade Payables
Solution : It's the reverse of an increase in accounts payable, as you might now anticipate. If the amount owed to vendors or suppliers has reduced, this indicates that money has really been paid to them, leaving the business with less cash. Because of this, a Decrease in accounts payable signals a decline in cash flow.Hence it will be deducted from Operating activity.
Hence the correct answer is option 2.
Question : To Calculate Cash Flow from Operating Activities, which of the following will be deducted?
Option 1: Decrease in Inventories
Option 2: Increase in Trade Payables
Option 3: Decrease in Trade Payables
Question : What adjustments are required for a decrease or increase in Trade Payables/bills payable while calculating 'Cash flow from operating activities'?
Option 1: Deducted and added
Option 2: Added and deducted
Option 3: Added and added
Option 4: Deducted and deducted
Question : Cash Flow from Operating Activities + Cash Flow from Investing Activities + Cash Flow from Financing Activities =
Option 1: Net increase in Cash and Cash equivalents
Option 2: Net Decrease in cash and cash equivalents
Option 3: Both 1 and 2
Option 4: None of the above
Question : Net decrease in working capital other than cash and cash equivalents will increase, decrease or not change cash flow from operating activities.
Option 1: Increase
Option 2: Decrease
Option 3: Either A or B
Option 4: none of the above
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