Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:
Which of the following statement is true?
Options:
If the balance of the current asset decreases, cash flow from operations will increase.
If the balance of the current asset increases, cash flow from operations will decrease.
Neither 1 nor 2
Both option 1 and 2
Correct Answer:
Both option 1 and 2
Explanation:
If balance of a current liability increases, or balance of current asset decreases, Cash flow from operations will increase. If balance of a liability decreases and balance of current assets increases,, cash flow from operations will decrease.