In cash flow statement the item of Interest is shown in:
a. Operating activities
b. Financing activities
c. Investing activities

Both (a) and (b)

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Both (a) and (c)

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Both (b) and (c)

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All the three

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Solution

The correct option is B Both (b) and (c)
Interest received in cash from loans and advances is recorded under investing activities. Interest paid on loans, debentures and advances is recorded under financing activities.

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Similar questions

Q. The last item on statement of cash flows prior to the schedule of non-cash investing and financing activities reports _________________.

A company purchased machinery worth Rs 1 crore on hire purchases basis. The accountant seeks your advice in accounting for the :

(i) Payment of instalment and

(ii) Interest under operating, investing and financing activity in the preparation of the Cash Flow Statement.

Q. Which of the following would not be considered a non-cash investing and financing activity in preparing a statement of cash flows?

From the following information, calculate Cash Flow from Investing and Financing Activities:

Particulars	31^st March 2019 (₹)	31^st March 2018 (₹)
Machinery (At cost)	50,000	40,000
Accumulated Depreciation	12,000	10,000
Capital	35,000	30,000
Bank Loan	...	10,000

During the year, a machine costing ₹ 10,000 was sold at a loss of ₹ 2,000. Depreciation on machinery charged during the year amounted to ₹ 6,000.

Classify the following into (i) Operating Acivities, (ii) Investing Activities, (iii) Financing Activities and (iv) Cash Equivalents while preparing a Cash Flow Statement:
1. Cash Sales
2. Cash Received from Trade Receivables
3. Purchase of Building
4. Sale of Building
5. Issue of Share Capital or Debentures
6. Buy- back of Equity Shares
7. Dividend Paid
8. Interest paid on Debentures or Long - term Loans by (a) Finance Company (b) Non- Finance Company
9. Cash Purchases
10. Cash paid to trade payables
11. Redemption of Debentures and Preference Shares
12. Repayment of Long - term Loan
13. Office Expenses
14. Selling and Distribution Expenses
15. Manufacturing Expenses
16. Purchase of Goodwill
17. Sale of Patent
18. Purchase of Investments
19. Sale of Investments by (a) Finance Company (b) Non- Finance Company
20. Commission and Royalty received
21. Interest received on Investments by (a) Finance company (b) Non Finance company
22. Dividend received on Shares by (a) Finance Company (b) Non - Finance company
23. Rent Paid
24. Rent received if (a) Company's main business is property business (b) Other business
25. Income Tax Paid
26. Income Tax Refund received
27. Bank Balance
28. Short- term Deposits in Bank
29. Investment in Short - term or Marketable Securities

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In cash flow statement the item of Interest is shown in:a. Operating activitiesb. Financing activitiesc. Investing activities

The correct option is B Both (b) and (c)Interest received in cash from loans and advances is recorded under investing activities. Interest paid on loans, debentures and advances is recorded under financing activities.

In cash flow statement the item of Interest is shown in:
a. Operating activities
b. Financing activities
c. Investing activities

The correct option is B Both (b) and (c)
Interest received in cash from loans and advances is recorded under investing activities. Interest paid on loans, debentures and advances is recorded under financing activities.