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Home › Bihar Board Class 12 (Commerce) › Accountancy › Cash Flow Statement › An increase in current assets, other than cash, …

An increase in current assets, other than cash, has what effect on operating cash flow?

AIt is added to profit
BIt is ignored in totals
CIt moves to financing
DIt is deducted from profit
Answer & Solution
Correct answer: D. It is deducted from profit
A rise in current assets such as stock or debtors ties up cash, so it is deducted from operating profit.
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