Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Cash from operation is equal to :

Options:

Net Profit + Increase in Current Assets

Net Profit - Decrease in Current Liabilities

Operating Profit + Adjustment of Current Assets and Current Liabilities

None of the above

Correct Answer:

Net Profit - Decrease in Current Liabilities

Explanation:

If the balance of a current liability increases, or the balance of a current asset decreases cash flow from operations will increase. If the balance of a liability decreases and the balance of current assets increases, cash flow from operations will decrease.