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Home Questions 88APKVDP9F
Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Match the following for an enterprise while making a cash flow statement:

LIST 1 LIST 2
1) Increase in current assets a) Cash outflow
2) Increase in current liabilities b) Cash inflow
3) Issue of debentures c) Added to operating profit before working capital changes
4) Purchase of own debentures d) Deducted from operating profit before working capital changes
Options:

1) b, 2) a, 3) d, 4) c

1) a, 2) d, 3) b, 4) c

1) d, 2) c, 3) b, 4) a

1) c, 2) d, 3) a, 4) b

Correct Answer:

1) d, 2) c, 3) b, 4) a

Explanation:

* Increase in current assets and Increase in current liabilities- An increase in current assets and a decrease in current liabilities are to be deducted while increase in current liabilities and decrease in current assets are to be added up.

* Issue of debentures- The issue helps the company to get cash whereas purchase makes the company to give cash.

* Purchase of own debentures- Purchase makes the company to give cash.

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