Sequence of the items appear in the cash flow statement :
A. Cash and Cash Equivalents at the end of the period.
B. Proceeds from sale of Equipment.
C. Net profit before Tax and Extra ordinary items.
D. Decrease in Trade payable and Increase in Trade Receivables.
E. Amortisation of depreciation and patents.
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → C, E, D, B, A
Under the indirect method a cash flow statement starts from profit, adjusts it to cash from operations, then shows investing and financing flows, and ends with the closing cash.
(C) Net profit before Tax and Extra ordinary items — the starting point of cash flows from operating activities.
(E) Amortisation of depreciation and patents — non-cash charges added back before working capital changes.
(D) Decrease in Trade payable and Increase in Trade Receivables — working capital changes, deducted after the operating profit before working capital changes.
(B) Proceeds from sale of Equipment — a cash inflow from investing activities, which come after operating activities.
(A) Cash and Cash Equivalents at the end of the period — the last line of the statement.
NCERT (2026-27 edition):
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