Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:
How preliminary expenses are treated in the cash flow statement of the company?
Options:
Added to net profit
Deducted from net profit
No use in cash flow statement
None of these
Correct Answer:
Added to net profit
Explanation:
Preliminary expenses when written off do not make any cash payment. So, it is added back to the net profit to calculate operating profit of the company.