If the net profits made during the year are ₹50,000 and the bills receivables have decreased by ₹10,000 during the year, then the cash flow from operating activities will be equal to:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 60,000
While working out cash from operating activities, a decrease in a current asset is added to the net profit. Bills receivable fell by Rs. 10,000, which means Rs. 10,000 more was collected in cash than was earned on credit this year.
Net profit = Rs. 50,000
Add: Decrease in bills receivable = Rs. 10,000
Cash flow from operating activities = Rs. 60,000
NCERT (2026-27 edition):
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