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.
Deferred Tax, Goodwill write-off, Depreciation are the non-cash items.
As per AS-3, under indirect method, net cash flow from operating activities is determined by adjusting net profit or loss for the effect of :
Non-cash items such as depreciation, goodwill written-off, provisions, deferred taxes, etc., which are to be added back.
* Increase in Stock is a increase in current assets not a non cash item.