If the net profit earned during the year is ₹1,00,000 and the amount of bills receivables in the beginning and the end of the year is ₹20,000 and ₹40,000 respectively, then cash flow from operating activities will be:

₹80,000

The correct answer is option 3- ₹80,000.

Net profit earned                                                      = 1,00,000
Less: increase in Bills receivables (40,000-20,000)  = 20,000
Cash flow from operating activities                        = (1,00,000 - 20,000)
                                                                                 = ₹80,000