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Decrease in the value of Trade Receivable will be ……..
- a)Added in operating activities
- b)Deducted in Investing activities
- c)Added in Investing Activities
- d)Deducted in operating activities
Correct answer is option 'A'. Can you explain this answer?
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Decrease in the value of Trade Receivable will be ……..a)...
Decrease in the value of Trade Receivables will be added in operating activities while preparing cash flow statement.
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Decrease in the value of Trade Receivable will be ……..a)...
Recorded as a credit entry in the books of accounts. This is because the decrease in the value of Trade Receivable means that the company has received payment for the outstanding amount owed by its customers. As a result, the amount owed by customers decreases, reducing the Trade Receivable balance. This reduction in the balance is recorded as a credit entry to reflect the decrease in the value of the Trade Receivable.
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Decrease in the value of Trade Receivable will be ……..a)...
Because decrease in trade receivables basically means receiving the payment against credit sale of goods and as we know that sale of goods is an operating activity....hence the decrease in trade receivables, i.e, receiving the payment will be added to operating activities
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Decrease in the value of Trade Receivable will be ……..a)Added in operating activitiesb)Deducted in Investing activitiesc)Added in Investing Activitiesd)Deducted in operating activitiesCorrect answer is option 'A'. Can you explain this answer?
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