Which of the following will result in increase in cash flow from operations of a company? |
Increase in Stock Increase in Creditors Decrease in Bills Payable Increase in Debtors |
Increase in Creditors |
The correct answer is option 2- Increase in Creditors. If balance of a current liability increases, or balance of current asset decreases, cash flow from operations will increase. If balance of a liability decreases and balance of current assets increases, cash flow from operations will decrease. Thus, here creditors are increased which will make the cash flow from operations to increase. |