Arrange the following activities in correct order while preparing Cash Flow Statement.
A. Increase in prepaid Insurance.
B. Purchase of copyrights
C. Operating profit before working capital changes
D. Income tax paid
E. Redemption of preference shares.
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → C, A, D, B, E
The statement runs Operating → Investing → Financing, and within operating activities the indirect method starts from operating profit before working capital changes.
(C) Operating profit before working capital changes — the first subtotal.
(A) Increase in prepaid Insurance — a working capital change deducted next.
(D) Income tax paid — deducted from cash generated from operations.
(B) Purchase of copyrights — an intangible fixed asset, so an investing outflow.
(E) Redemption of preference shares — a financing outflow, shown last.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
NCERT (2026-27 edition):
|
