Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

What will be the cash flow from operating activities if the company's net profit is ₹80,000 after writing off goodwill ₹10,000?

Options:

₹60,000

₹70,000

₹90,000

₹85,000

Correct Answer:

₹90,000

Explanation:

The correct answer is option 3- ₹90,000.

Writing off goodwill does not make any cash outflow so it is added back to net profit. So, after adding back cash flow from operating activities is (80,000 + 10,000) ₹90000.