Question

While computing cash from operating activities, indicate whether the following items will be added or subtracted from the net profit. If not to be considered, write NC

	Items:	Treatment
(a)	Increase in the value of creditors
(b)	Increase in the value of patents
(c)	Decrease in prepaid expenses
(d)	Decrease in income received in advance
(e)	Decrease in value of inventory
(f)	Increase in share capital
(g)	Increase in the value of trade receivables
(h)	Increase in the amount of outstanding expenses
(i)	Conversion of debentures into shares
(j)	Decrease in the value of trade payables
(k)	Increase in the value of trade receivables
(l)	Decrease in the amount of accrued income.

Answer 1

	Items:	Treatment
(a)	Increase in the value of creditors	+
(b)	Increase in the value of patents	NC
(c)	Decrease in prepaid expenses	+
(d)	Decrease in income received in advance	−
(e)	Decrease in value of inventory	+
(f)	Increase in share capital	NC
(g)	Increase in the value of trade receivables	−
(h)	Increase in the amount of outstanding expenses	+
(i)	Conversion of debentures into shares	NC
(j)	Decrease in the value of trade payables	−
(k)	Increase in the value of trade receivables	−
(l)	Decrease in the amount of accrued income.	+