Question : How is the cash flow due to the sales calculated?
Option 1: opening debtors + sales + opening B/R – closing debtors – closing B/R
Option 2: cash collections + cash sales
Option 3: Both 1 and 2
Option 4: None of the above
Answer (1)
14th Jan, 2024
Correct Answer: Both 1 and 2
Solution : By combining cash sales and cash collections, the cash flow due to cells may be determined. It can also be computed by adding sales, opening B/R, opening debts, and closing debtors, then deducting closing B/R and closing B/R.
Hence the Correct answer is option 3.
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