Cash Flow Doubts....................?

vikas gupta (c.a final....) (714 Points)

04 January 2011  

1. What are incidental expenses in cash flow?

2. Why do TAXATION come in cash flow from operating activities only....?

3. Why do we write opposie if something increase like current assets they should be added but in changes from working capital

Add ; Decrease in current assets and increase in current liab.

Less : Increase in current assets and dec. in current liab...

Cash flow from operating activities >>>>

Why do we add decrease in current assets and not less?

4.Why goodwill is amortised?

5.Why do we take " Provision for doubtful debts " in changes from working capital and why dont we add it to net profit

Net profit

+ Reserves

+ provision for income tax

+ provision for doubtful debts ( this is not correct but why ? )
 

6.Parveen sharma sir said

if 2 balance sheet + profit and loss a/c = direct mehtod

only 2 balance sheet = indirect method

why?

 

 

Parveen sharma said cash flow from operating activities are principal revenue generating activities and INCIDENTAL expenses ...incidental means left our portion which does not come in investing and financing activities .........

I didnt get good answer of question 4,5....still have a doubt