While calculating cash flow from operating activities in the cash flow statement of a company which will be deducted from the net profit?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- Increase in Debtors.
Increase in Debtors is deducted from the net profit while calculating cash flow from operating activities in the cash flow statement of a company.
All others are added.
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 in the net profit while calculating cash flow from operating activities in the cash flow statement of a company.