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Which one of the following items will increase net cash flow from operating activities?

when using the indirect method of converting net income to net cash flow?

 

a. Depreciation.

b. Increase in accounts receivable

c. Purchase of fixed assets

 

 

d. Dividends paid.

 

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Question added by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia
Date Posted: 2015/05/18
Asad Ahmed
by Asad Ahmed , Manager Finance & Company Secretary , Connect Communications Pvt. Ltd.

a. Depreciation increase the net cash flow from operating activities

ASIF KHAN
by ASIF KHAN , Senior Finance Manager , Morganti GCC

  • If balance of an asset increases, cash flow from operations will decrease.
  • If balance of an asset decreases, cash flow from operations will increase

According to the above point we can consider the depreciation that it will increase the net cash flow from operating activities 

Hussain Valeji
by Hussain Valeji , Senior Accountant , Hassan Abul Trading and Contracting Co

Depreciation added in operating cashflow

MA. ODEZA ALBACITE
by MA. ODEZA ALBACITE , Accountant , Panasonic Industrial Devices Singapore, Pte. Ltd.

Depreciation it's an expense that does  not required cash outlay thus increases cash flow

 

Ahmed Abdi Mahad
by Ahmed Abdi Mahad , Director of Internal Auditing Directorate , Jigjiga University

Depreciation is a non cash expense and it decreases the net income of an entity but does not affect the cash cash account. So it will  increase the net cash flow from operating activities.

So, Choice A is the correct answer for this question.

Asif Hussain
by Asif Hussain , Accountant , Al Howail Company

Depreciation will increase the cash flow from Operating activities by adding back.

Abdul Majid Khatri
by Abdul Majid Khatri , A Qualified Chartered Accountant , Honeycomb Logistics Pvt. Ltd.

Option (A).... Depreciation.........!!!

Hussein Ahmed Hussein AbedElhalim
by Hussein Ahmed Hussein AbedElhalim , Head of AP, banks, and Tax , Hygienic Paper Company LTD

A) Depreciation which is the correct answer.

Ahmed kandil
by Ahmed kandil , Cost Controller , Battour Holding Cpompany

Answer(A) is the correct answer Thank you

mohamed Hakim CMA CPA Candidate
by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

answer A : is the correct answer

1- indirect method for preparing Cash Flow   use all non cash expense to reconcile from net income (financial reporting )

2- as MR ASIF KHAN 

Explain in his words was great answer was correct

 the correct words  

  • If balance of an asset increases, cash flow from operations will decrease.
  • If balance of an asset decreases, cash flow from operations will increase

Yasser Elnewhy
by Yasser Elnewhy , Financial Consultant , crystal llc

a. Depreciation.

a non cash expense ,all other will decrease cash flow and and they not operational

 

 

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