Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:
Cash from Operating activities will decrease due to:
Options:
Increase in Current Assets
Decrease in Current Liabilities
Both 1 and 2
None of 1 and 2
Correct Answer:
Both 1 and 2
Explanation:
The increase in current assets and decrease in current liabilities are deducted from the operating profit, and the decrease in current assets and increase in current liabilities are added to the operating profit so as to arrive at the exact amount of net cash flow from operating activities.