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 increase in Trade Payables
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 increase in Trade Payables

Option 1: Added

Option 2: Deducted

Option 3: Both A and B

Option 4: None of the above

Team Careers360 · Accepted Answer

Correct Answer: Added

Solution : Answer = Added

When calculating cash flow from operating activities, an increase in trade payables is added back to net profit. This adjustment accounts for the fact that an increase in payables represents cash that hasn't been spent yet, thus increasing operating cash flow when reconciling net profit to cash flow.
Hence, the correct option is 1.

Exams

Colleges

Predictors

Resources

Quick links

B.Tech CompanionUse Now Your one-stop Counselling package for JEE Main, JEE Advanced and BITSAT

Exams

Colleges & Courses

Predictors

Resources

Exams

Colleges

Predictors & E-Books

Resources

Engineering Preparation

Medical Preparation

Online Courses

Products

Exams

Colleges

Resources

Exams

Colleges

Predictors & Articles

Resources

Exams

Colleges

Predictors

Resources

NEET CompanionUse NowYour one-stop Counselling package for NEET, AIIMS and JIPMER

Exams

Colleges

Upcoming Events

Resources

Exams

Colleges

Resources

Quick Links

Top Streams

Specializations

Resources

Top Providers

Exams

Colleges

Resources

Diploma Colleges

Exams

Colleges

Resources

Exams

Resources

Top Courses & Careers

Colleges

Exams

Upcoming Events

Resources

Other Exams

Exams

Colleges

Top Countries

Student Visas

Exams

Top Schools

Products & Resources

NCERT Study Material

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 increase in Trade PayablesOption 1: AddedOption 2: DeductedOption 3: Both A and BOption 4: None of the above

Related Questions

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 increase in Trade Payables

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 Increase in Trade Receivables?

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 Increase in Trade Receivables?

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,

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,

Trending Articles/News

Sign In/Sign Up

Download the Careers360 App on your Android phone

B.Tech CompanionUse Now
Your one-stop Counselling package for JEE Main, JEE Advanced and BITSAT

NEET CompanionUse Now
Your one-stop Counselling package for NEET, AIIMS and JIPMER

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 increase in Trade Payables
Option 1: Added
Option 2: Deducted
Option 3: Both A and B
Option 4: None of the above