CUET Preparation Today
While making cash flows from operating activities, which one of the following will be deducted from Cash generated from operations? |
Increase in Current Assets and Decrease in Current Liabilities Tax Paid Tax Made Dividend Paid |
Tax Paid |
Correct answer: Option (2) → Tax Paid Concept: Computing net cash from operating activities, from Cash Flow Statement. After arriving at “Cash generated from operations,” income tax paid is deducted as the last item to obtain net cash flow from operating activities. Changes in current assets/liabilities are adjusted earlier, and dividend paid is a financing item; so the amount deducted at this stage is Tax Paid. Hence Option (2). |
