Arrange the following steps in the proper sequence when preparing a Cash Flow Statement:(A) Net cash flow from operating activities(B) Cash flow from financing activities(C) Cash flow from investing activities(D) Calculate net profit before tax and extraordinary items in working notes Choose the correct answer from the options given below:
- A(A), (B), (C), (D)
- B(D), (A), (C), (B)
- C(B), (A), (D), (C)
- D(C), (B), (D), (A)
Solution & Step-by-step Explanation
According to the format prescribed by accounting standards (AS-3), the sequential calculation workflow is:Step 1: Calculate net profit before tax and extraordinary items in working notes (D).Step 2: Compute Net cash flow from operating activities (A).Step 3: Compute Cash flow from investing activities (C).Step 4: Compute Cash flow from financing activities (B).This matches the sequence (D), (A), (C), (B).