Arrange the following Cash Flows from Operating Activities in sequence as per indirect method-
(A) Income Tax Paid
(B) Net Profit/Loss before Tax and Extraordinary Items
(C) Operating Profit before Working Capital changes
(D) Effects of Extraordinary Items relating to operating activity
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (B), (C), (A), (D)
(B) Net Profit/Loss before Tax and Extraordinary Items — the starting point of the indirect method; non-cash and non-operating items are then adjusted.
(C) Operating Profit before Working Capital changes — the result after those adjustments; changes in current assets and current liabilities are then taken.
(A) Income Tax Paid — deducted from the cash generated from operations.
(D) Effects of Extraordinary Items relating to operating activity — shown last, just before the net cash from operating activities.
NCERT (2026-27 edition):
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