Accountancy Mock: Cash Flow Statement (AS-3) - Detailed Solutions

💡 Topper Strategy

• The Proposed Dividend Rule: Remember that current-year proposed dividends are ignored until approved by shareholders. Only the previous year's proposed dividend is added to find NPBT and shown as a financing outflow.
• Financial vs. Non-Financial Firms: Always check the type of company mentioned in the question. Interest and dividends received are Operating activities for financial firms, but Investing activities for non-financial firms.
• Bank Overdrafts: Under the latest accounting guidelines, changes in Bank Overdrafts and Cash Credit balances are classified as Financing Activities, not as part of Cash and Cash Equivalents.