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: Sequence for Cash Flow Statement Preparation
Initiate by determining net profit before tax and extraordinary items (E).
Subsequently, compute cash flows from operating activities (A).
Follow this by calculating cash flows from investing activities (D).
Next, determine cash flows from financing activities (B).
Conclude by calculating the net increase or decrease in cash and cash equivalents for the year (C).
Step 2: Determination
The established sequence is: E, A, D, B, C (as indicated by option D).