Practice - Key Adjustments in Cash Flow Statement
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Practice Questions
Test your understanding with targeted questions
What do we do with depreciation in the cash flow statement?
💡 Hint: Think about how depreciation affects cash balances.
If current assets increase, what adjustment do we make?
💡 Hint: What happens to cash when investments in assets increase?
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Interactive Quizzes
Quick quizzes to reinforce your learning
How are losses from asset sales treated in a cash flow statement?
💡 Hint: Remember how asset sales affect income but not actual cash flow.
True or False: An increase in liabilities means cash is coming into the business.
💡 Hint: Think about how liabilities affect cash flow.
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Challenge Problems
Push your limits with advanced challenges
Prepare a cash flow statement given the following data: Net income ₹200,000; Depreciation ₹25,000; Loss on sale of equipment ₹10,000; Increase in accounts receivable ₹15,000; Decrease in accounts payable ₹5,000.
💡 Hint: Focus on how to handle each component properly for cash adjustments.
Discuss the potential consequences of miscalculating adjustments in a cash flow statement for decision making.
💡 Hint: Think about how trust in financial reporting might be influenced by accuracy.
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