Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Decrease in Current Asset is____________to net profit to calculate cash flow from operating activity while preparing cash flow statement.

Options:

Subtracted

Added

Divided

Multiply

Correct Answer:

Added

Explanation:

The correct answer is option 2- Added.

* Decrease in Current Asset is added to net profit to calculate cash flow from operating activity while preparing cash flow statement.

Increase in current assets and decrease in current liabilities are to be deducted while increase in current liabilities and decrease in current assets are to be added to the net profit to calculate cash flow from operating activity.