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While calculating cash flow from operating activities, which will be added? - Accounts

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Question

While calculating cash flow from operating activities, which will be added?

Options

  • Increase in inventory

  • Increase in creditors

  • Decrease in bills payable

  • Increase in trade receivables

MCQ
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Solution

Increase in creditors

Explanation:

An increase in creditors indicates that the business has saved money by delaying payments to suppliers. Given its status as a cash source, cash flow from operational activities includes it.

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Chapter 13: Cash Flow Statement - OBJECTIVE TYPE QUESTIONS [Page 13.154]

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D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 13 Cash Flow Statement
OBJECTIVE TYPE QUESTIONS | Q (A) 9. | Page 13.154
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