IF trade receivable show (7150) in change in working capital...
Is it mean decreasing or increasing in Trade receivable???
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Cash Flow
Replies (10)
It is decrease in W.C.
If The Amount Is In Negative Then That Means Debtors i.e Trade Receivables Has Increased.
So In Your Case Trade Receivables Has Increased
how??
when we Sale on credit our debtor increases,which leads To block of cash Hence negative cash balance...
In above question negative cash balance should lead to increase in debtor..
Is my explaination right??
when we Sale on credit our debtor increases,which leads To block of cash Hence negative cash balance...
In above question negative cash balance should lead to increase in debtor..
Is my explaination right??
if debtors are shown negative in WC changes in cashcflow statements it means debtors have increased. if it shows negative in WC change only in question and not in cash flow statements it means debtors have decreased. please specify in your question
negative debtors are in Change in working capital..
As per your explaination it should be increasing
but a question in practice manual shows that they are decreasing
As per your explaination it should be increasing
but a question in practice manual shows that they are decreasing
working capital is current assets - current liabilities.. if assets decreases then working capital also decreases to that extent.. our assets value must always b greater than our liabilities indicating positive working capital.
@ Tech to abhi, please tell me question number and edition of pm
in simple words.
amount receivable from one of the debtor is Rs.100. (opening)
during the period amount received from debtor is Rs. 60.
so closing balance is Rs. 40.
___________________________________________________
here we should understand:
treatment in difference amount of opening and closing (100-40)
i.e. decrease in debtors = nothing but cash inflow
so we should take positive number in changes in working capital (cash inflow)
we should identify the cash inflow or out flow based on chages in working capital items
based on above explanation:
decrease in current asset : cash inflow
increase in current asset : cash outflow
QUE8 OF CASH FLOW STATEMENT OF PM MAY 16 EDITION
Q 8 of pm may 16 edition
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