In case the net profits made during the year by a company are ₹50,000 and bills payable have increased by ₹10,000 during the year then the cash flow from operating activities for the company will be:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹60,000
Under the indirect method, net profit is adjusted for changes in working capital. An increase in a current liability such as bills payable means the company has not yet paid that amount in cash, so it is added to the net profit.
Net profit = ₹50,000
Add: Increase in bills payable = ₹10,000
Cash flow from operating activities = ₹60,000
NCERT (2026-27 edition): NCERT (2026-27 edition):
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