Question : For calculating 'cash flow from operating activities' from the given figure of 'Net Profit' earned during a year, how would you deal with, if decrease in Bills Payable,
Option 1: Added
Option 2: Deducted
Option 3: Both A and B
Option 4: None of the above

Question

Question : For calculating 'cash flow from operating activities' from the given figure of 'Net Profit' earned during a year, how would you deal with, if decrease in Bills Payable,

Option 1: Added

Option 2: Deducted

Option 3: Both A and B

Option 4: None of the above

Team Careers360 · Accepted Answer

Correct Answer: Deducted

Solution : Answer = Deducted

When calculating cash flow from operating activities, a decrease in bills payable represents a decrease in liabilities, indicating cash outflow. Therefore, it should be deducted from net profit. This adjustment reflects the actual cash impact of changes in bills payable on the company's operating cash flow.
Hence, the correct option is 2.

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Question : For calculating 'cash flow from operating activities' from the given figure of 'Net Profit' earned during a year, how would you deal with, if decrease in Bills Payable,Option 1: AddedOption 2: DeductedOption 3: Both A and BOption 4: None of the above

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Question : For calculating 'cash flow from operating activities' from the given figure of 'Net Profit' earned during a year, how would you deal with, if decrease in Bills Payable,
Option 1: Added
Option 2: Deducted
Option 3: Both A and B
Option 4: None of the above