The following is an extract from a cash flow statement prepared by a trainee accountant.

Cash flows from operating activities

$000$

Profit before taxation

$4,590$

Adjustments for Depreciation

$(1,430)$

Loss on sale of building

$690$

Decrease in inventories

$260$

Decrease in trade receivables

$(780)$

Net cash from operating activities

$6,190$

Which of the following criticisms of this extract are correct?

$1$ Depreciation should have been added, not deducted.

$2$ Loss on sale of building should have been deducted, not added.

$3$ Decrease in inventories should have been deducted, not added.

$4$ Decrease in trade receivables should have been added, not deducted.

Question $14$ Answer

a$.$

$2$ and $3$

b$.$

$3$ and $4$

c$.$

$1$ and $3$

d$.$

$1$ and $4$