Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:
While calculating cash flow from operating activities in the cash flow statement of a company which will be deducted from the net profit?
Options:
Decrease in Prepaid Expenses
Decrease in Debtors
Increase in Debtors
Increase in Creditors
Correct Answer:
Increase in Debtors
Explanation:
Changes in current assets and liabilities during the period. Increase in current assets and decrease in current liabilities are to be deducted while increase in current liabilities and decrease in current assets are to be added up.