While preparing Cash Flow’ Statement of Sharda Ltd. ‘Depreciation provided on fixed assets’ was added to net profit to calculate cash flow from operating activities. Was the accountant correct in doing so? Give reason. Post category:Accountancy Reading time:1 mins read SOLUTION Yes, accountant is correct.Reason: Depreciation is non-cash item. Please Share This Share this content Opens in a new window Twitter Opens in a new window Facebook Opens in a new window Google+ Opens in a new window Pinterest Opens in a new window LinkedIn Opens in a new window Viber Opens in a new window VK Opens in a new window Reddit Opens in a new window Tumblr Opens in a new window Viadeo Opens in a new window WhatsApp Read more articles Previous PostState with reason whether the issue of 9% debentures to a vendor for the purchase of machinery of Rs. 50,000 will result in inflow, outflow or no flow’ of cash while preparing Cash Flow Statement. Next PostWhile preparing Cash Flow Statement, the accountant of ‘Rachna Ltd.’, a financing company, included ‘Interest received on loan’ in financing activities. Was he correct in doing so? Give reason. You Might Also Like Ashok, Bhim and Chetan who are sharing profits in the ratio of 5: 3: 2, decide to share profits in the ratio of 2: 3: 5 with effect from 1st April, 2022. Workmen Compensation Reserve appears at Rs. 1,20,000 in the Balance Sheet as at 31st March, 2022 and Workmen Compensation Claim is estimated at Rs. 1,50,000. Pass Journal entries for the accounting treatment of Workmen Compensation Reserve. October 28, 2022 From the following information, calculate value of Opening Inventory: August 13, 2022 Gross Profit Ratio of a company is 25%. State giving reason, which of the following transactions will (a) increase or (b) decrease or (c) not alter the Gross Profit Ratio. (i) Purchases of Stock-in-Trade Rs. 50,000. (ii) Purchases Return Rs. 15,000. (iii) Cash Sale of Stock-in-Trade Rs. 40,000. (iv) Stock-in-Trade costing Rs. 20,000 withdrawn for personal use. (v) Stock-in-Trade costing Rs. 15,000 distributed as free sample. August 17, 2022 Leave a Reply Cancel replyYou must be logged in to post a comment.