Among the following items given which is/are needed to be added to get net cash from operating activities while preparing Cash Flow Statement?
I. Increase in current liabilities
II. Decrease in current liabilities
III. Increase in current assets
IV. Income tax paid
Only I
The correct answer is option 1. When preparing the Cash Flow Statement using the indirect method, an increase in current liabilities needs to be added to the net income to get the net cash from operating activities. This is because an increase in liabilities indicates that the company has used less cash to finance its operations, which increases cash flow.
Proceeds from sale of patent is classified under which activity in Cash Flow Statement?
Which of the following activities should be shown separately in the cash flow statement prepared as per Accounting Standard-3 ?
a. Cash flow from borrowing activities.
b. Cash flow from operating activities.
c. Cash flow from financing activities.
d. Cash flow from investing activities.
e. Cash flow from miscellaneous activities.
Codes :
Cash from Operation is equal to
Match List–I with List–II :
List I (Transaction) | List II (Activity) | ||
(a) | Cash payments of salaries and wages | 1. | Investing |
(b) | Cash proceeds from issuing shares at a premium | 2. | Operating |
(c) | Payment of income tax | 3. | Financing |
(d) | Tax deducted at source on interest received from subsidiary company | ||