Question : In cash flow statement, Adjustment for payment of tax is
Option 1: Payment of tax will be deducted under 'Cash flows from operating activities'
Option 2: Payment of tax will be added under 'Cash flows from operating activities'
Option 3: Payment of tax will be deducted under 'Cash flows from Financing activities'
Option 4: None of the above
Correct Answer: Payment of tax will be deducted under 'Cash flows from operating activities'
Solution : Answer = Payment of tax will be deducted under 'Cash flows from operating activities'
In the cash flow statement, the adjustment for the payment of tax is deducted under 'Cash flows from operating activities'. This adjustment reflects the cash outflow related to taxes paid as part of the operational activities of the business.
Hence, the correct option is 1.
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