Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Which of the following is not a Cash Outflow from operating activity?

Options:

Increase in Creditors

Increase in Debtors

Increase in Stock

Increase in prepaid expenses

Correct Answer:

Increase in Creditors

Explanation:

If balance of a current liability increases, or balance of current asset decreases cash flow from operations will increase. If balance of a liability decreases and balance of current assets increases,, cash flow from operations will decrease. Thus, here creditors are increased which will make the cash flow from operations to increase leads to inflow of cash.