Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

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