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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


Team Careers360 13th Jan, 2024
Answer (1)
Team Careers360 20th Jan, 2024

Correct Answer: Deducted and added


Solution : Answer = Deducted and added

A decrease in the value of current liabilities will increase the value of working capital and an increase in the value of current liabilities will decrease the value of working capital.
Hence, the correct option is 1.

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