Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

While computing cash from operations, which item will not affect the cash from operations?

Options:

Increase in value of prepaid expenses

Decrease in value of Inventory

Increase in share capital

Increase in value of trade receivables

Correct Answer:

Increase in share capital

Explanation:

The correct answer is option 3- Increase in share capital.

Increase in share capital won't affect cash from operations. Share capital represents funds raised from issuing shares, which doesn't directly impact the cash generated from the company's operating activities. It is a financing activity.