{"id":48335,"date":"2024-04-15T22:39:45","date_gmt":"2024-04-15T22:39:45","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=48335"},"modified":"2024-04-15T22:39:45","modified_gmt":"2024-04-15T22:39:45","slug":"the-following-is-the-position-of-current-assets-and-current-liabilities-31st-december-94-31st-december-95-debtors-rs-30000-rs-24000-creditors-rs-20000-rs-30000-stock-rs-16000-rs-20000-p","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-following-is-the-position-of-current-assets-and-current-liabilities-31st-december-94-31st-december-95-debtors-rs-30000-rs-24000-creditors-rs-20000-rs-30000-stock-rs-16000-rs-20000-p\/","title":{"rendered":"The following is the position of current assets and current liabilities: 31st December, 94 31st December, 95 Debtors Rs. 30,000 Rs. 24,000 Creditors Rs. 20,000 Rs. 30,000 Stock Rs. 16,000 Rs. 20,000 Prepaid expenses Rs. 8,000 Rs. 12,000 Profit made during the year Rs. 5,00,000 after considering the following items: Depreciation on plant Rs. 20,000 Preliminary expenses written off Rs. 10,000 Transfer to general reserve Rs. 14,000 Profit on sale of land Rs. 6,000 The cash from operations is:"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;Rs. 5,44,000&#8243; option2=&#8221;Rs. 5,38,000&#8243; option3=&#8221;Rs. 5,46,000&#8243; option4=&#8221;Rs. 5,54,000&#8243; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is: <strong>A. Rs. 5,44,000<\/strong><\/p>\n<p>The cash from operations is calculated as follows:<\/p>\n<ul>\n<li>Net profit + Depreciation + Increase in current assets &#8211; Decrease in current liabilities<\/li>\n<\/ul>\n<p>In this case, the net profit is Rs. 5,00,000. The depreciation is Rs. 20,000. The current assets increased by Rs. 8,000 (30,000 &#8211; 24,000) and the current liabilities increased by Rs. 10,000 (30,000 &#8211; 20,000). Therefore, the cash from operations is:<\/p>\n<ul>\n<li>5,00,000 + 20,000 &#8211; 8,000 &#8211; 10,000 = 5,44,000<\/li>\n<\/ul>\n<p>The other options are incorrect because they do not take into account all of the relevant information. For example, option B does not include the depreciation expense, and option C does not include the increase in current assets.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;Rs. 5,44,000&#8243; option2=&#8221;Rs. 5,38,000&#8243; option3=&#8221;Rs. 5,46,000&#8243; option4=&#8221;Rs. 5,54,000&#8243; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-48335","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The following is the position of current assets and current liabilities: 31st December, 94 31st December, 95 Debtors Rs. 30,000 Rs. 24,000 Creditors Rs. 20,000 Rs. 30,000 Stock Rs. 16,000 Rs. 20,000 Prepaid expenses Rs. 8,000 Rs. 12,000 Profit made during the year Rs. 5,00,000 after considering the following items: Depreciation on plant Rs. 20,000 Preliminary expenses written off Rs. 10,000 Transfer to general reserve Rs. 14,000 Profit on sale of land Rs. 6,000 The cash from operations is:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/the-following-is-the-position-of-current-assets-and-current-liabilities-31st-december-94-31st-december-95-debtors-rs-30000-rs-24000-creditors-rs-20000-rs-30000-stock-rs-16000-rs-20000-p\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The following is the position of current assets and current liabilities: 31st December, 94 31st December, 95 Debtors Rs. 30,000 Rs. 24,000 Creditors Rs. 20,000 Rs. 30,000 Stock Rs. 16,000 Rs. 20,000 Prepaid expenses Rs. 8,000 Rs. 12,000 Profit made during the year Rs. 5,00,000 after considering the following items: Depreciation on plant Rs. 20,000 Preliminary expenses written off Rs. 10,000 Transfer to general reserve Rs. 14,000 Profit on sale of land Rs. 6,000 The cash from operations is:\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;Rs. 5,44,000&#8243; option2=&#8221;Rs. 5,38,000&#8243; option3=&#8221;Rs. 5,46,000&#8243; option4=&#8221;Rs. 5,54,000&#8243; correct=&#8221;option1&#8243;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/the-following-is-the-position-of-current-assets-and-current-liabilities-31st-december-94-31st-december-95-debtors-rs-30000-rs-24000-creditors-rs-20000-rs-30000-stock-rs-16000-rs-20000-p\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta 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5,44,000&#8243; option2=&#8221;Rs. 5,38,000&#8243; option3=&#8221;Rs. 5,46,000&#8243; option4=&#8221;Rs. 5,54,000&#8243; correct=&#8221;option1&#8243;]","og_url":"https:\/\/exam.pscnotes.com\/mcq\/the-following-is-the-position-of-current-assets-and-current-liabilities-31st-december-94-31st-december-95-debtors-rs-30000-rs-24000-creditors-rs-20000-rs-30000-stock-rs-16000-rs-20000-p\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-15T22:39:45+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 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land Rs. 6,000 The cash from operations 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following is the position of current assets and current liabilities: 31st December, 94 31st December, 95 Debtors Rs. 30,000 Rs. 24,000 Creditors Rs. 20,000 Rs. 30,000 Stock Rs. 16,000 Rs. 20,000 Prepaid expenses Rs. 8,000 Rs. 12,000 Profit made during the year Rs. 5,00,000 after considering the following items: Depreciation on plant Rs. 20,000 Preliminary expenses written off Rs. 10,000 Transfer to general reserve Rs. 14,000 Profit on sale of land Rs. 6,000 The cash from operations is:"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required 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