Arrange the following Cash Flows from Op

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Target Exam

CUET

Subject

-- Accountancy Part B

Chapter

Cash Flow Statement

Question:

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

(D) Effects of Extraordinary Items relating to operating activity

Choose the correct answer from the options given below:

Options:

(B), (C), (D),(A)

(B), (C), (A), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer:

(B), (C), (A), (D)

Explanation:

The correct answer is option 2- (B), (C), (A), (D).

(B) Net Profit/Loss before Tax and Extraordinary Items

(A) Income Tax Paid

(D) Effects of Extraordinary Items relating to operating activity

Performa of calculating cash flows from operating activities as per indirect method.

	Particulars	Amount
	Net Profit/Loss before Tax and Extraordinary Items
Add	Deductions already made in Statement of Profit and Loss on account of Non-cash items such as Depreciation, Goodwill to be Written-off.
Add	Deductions already made in Statement of Profit and Loss on Account of Non-operating items such as Interest.
Less	Additions (incomes) made in Statement of Profit and Loss on Account of Non-operating items such as Dividend received, Profit on sale of Fixed Assets.
	Operating Profit before Working Capital changes
Less	in case of increase in current assets (other than cash and cash equivalent) and decrease in current liabilities
Add	in case of decrease in current assets (other than cash and cash equivalent) and increase in current liabilities.
	Cash Flows from Operation Activities before Tax and Extraordinary items
Less	Income Tax Paid
+/–	Effects of Extraordinary Items
	Net Cash from Operating Activities