Question

Arrange the following in the context of Cash Flow Statement: 
(A) Calculation of cash flow from Operating Activities 
(B) Calculation of cash flow from Financing Activities 
(C) Calculation of net increase/decrease in cash and cash equivalent during the year 
(D) Calculation of cash flow from Investing Activities 
(E) Calculation of net profit before tax and extraordinary item 
Choose the correct answer from the options given below:

• A. D, A, B, E, C
• B. C, D, B, A, E
• C. A, E, B, D, C
• D. E, A, D, B, C

Hint:

Cash Flow Statement starts with net profit, then operating, investing, financing activities, and finally net cash change.

Answer 1

The Correct Option is D

Step 1: Understand sequence in Cash Flow Statement preparation
First, calculate net profit before tax and extraordinary items (E).
Then calculate cash flows from operating activities (A).
Followed by cash flows from investing activities (D).
Then cash flows from financing activities (B).
Finally, calculate net increase/decrease in cash and cash equivalents during the year (C).
Step 2: Conclusion
The correct sequence is: E, A, D, B, C (option D).