When reconciling profit with net cash flow from operating activities:
A) add increases in current assets and subtract increases in current liabilities.
B) subtract increases in current assets and add increases in current liabilities.
C) add increases in current assets and add increases in current liabilities.
D) none of the above

Question

Quizplus · Accepted Answer

When reconciling profit with net cash flow from operating activities, increases in current assets are subtracted because they represent cash outflows that do not affect profit, and increases in current liabilities are added because they represent cash inflows that do not affect profit.

When Reconciling Profit with Net Cash Flow from Operating Activities