If net profit made during the year are ₹50,000 and the bill receivables have decreased by ₹10,000 during the year then the cash flow from operating activities will be:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹60,000
Bills receivable are a current asset. A decrease means customers paid more cash than the new bills received during the year, so the decrease is added to net profit.
Net profit = ₹50,000
Add: decrease in bills receivable = ₹10,000
Cash flow from operating activities = ₹60,000
Deducting the decrease (₹40,000) would treat it as if bills had risen.
NCERT (2026-27 edition):
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