Accounting · Cash Flow Statement
In the preparation of a Cash Flow Statement (CFS) under the Indirect Method (as per Ind AS 7), how should the following items be treated when calculating Cash Flow from Operating Activities (CFO)? 1. Provision for Doubtful Debts (an increase during the year). 2. Gain on Sale of a Fixed Asset. 3. Interest Paid on Bank Loan.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11. Subtracted from Net Profit; 2. Added to Net Profit; 3. Added back to Net Profit.
- 21. Added to Net Profit; 2. Subtracted from Net Profit; 3. Shown as a separate Financing Activity.✓
- 31. Subtracted from Net Profit; 2. Subtracted from Net Profit; 3. Shown as a separate Financing Activity.
- 41. Added to Net Profit; 2. Added to Net Profit; 3. Added back to Net Profit.
Correct answer
1. Added to Net Profit; 2. Subtracted from Net Profit; 3. Shown as a separate Financing Activity.
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