Which among the following are the non-cash items?
A. Deferred Tax
B. Goodwill write-off
C. Depreciation
D. Increase in Stock
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → A, B and C only
A non-cash item is a charge (or credit) in the Statement of Profit and Loss that involves no flow of cash in the year; such items are added back to the profit while working out cash flow from operating activities.
A. Deferred Tax — Correct. Deferred tax is a book entry for tax that relates to the future; no tax is paid on it in the year.
B. Goodwill write-off — Correct. Writing off goodwill reduces the profit without any payment of cash.
C. Depreciation — Correct. Depreciation spreads the cost of an asset over its life; the cash was paid when the asset was bought.
D. Increase in Stock — Incorrect. Buying more stock uses cash; it is a change in working capital, deducted while working out operating cash flow, not a non-cash item.
NCERT (2026-27 edition):
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