Question

Which of the following accounts will not be considered when computing cash flow from operations? a....

Which of the following accounts will not be considered when computing cash flow from operations?

a.

Accounts receivable

b.

Inventories

c.

Plant & Equipment

d.

Accounts payable
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Homework Answers

Answer #1

Option (c) is correct

Plant & Equipment will not be considered when computing cash flow from operations. The reason is that only current assets and current liabilities are taken in the computation of cash flows from operations. Plant & equipment, being a non current asset, will not be taken in the computation.

Other options a, b and d are incorrect as they are current assets or current liabilities and will be taken in the computation of cash flow from operations.

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