Dear All
Can any one suggest, what will be the interpretation if Operating activity of any company as define in AS-3 comes in negative.
1 Replies
CA Dhiraj Ramchandani
(CA, M. com)
(10823 Points)
Replied 10 March 2010
AS PER AS 3
Operating Activities :
These are the principle revenue generating activities of the enterprise. It is the main business from cash receipts of customers, advances from them, payments to creditors and payments for expenses such as administrative, selling and distribution and overheads and production expenses, income tax etc.
So, obviously, it will be interpreted as the
A. expenses leaded incomes (payments > receipts) or
B. payments to creditors during the year are more than amount received from debtors or
C. Both of the above
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