When the instalment paid in respect of a fixed asset acquired on deferred payment basis includes both interest and loan, the interest element is classified under _________ activities.

Operating

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Investing

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Financing

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Solution

The correct option is C
Financing

When the instalment paid in respect of a fixed asset acquired on deferred payment basis includes both interest and loan, the interest element is classified under financing activities.

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Similar questions

When the instalment paid in respect of a fixed asset acquired on deferred payment basis includes both interest and loan, the interest element is classified under financing activities & and the loan element is classified under ___ activities.

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. When a fixed asset is bought as hire purchase, interest element is classified under ______ and loan element is classified under ________.

Classify the following activities into (i) Operating Activities, (ii) Investing Activities, and (iii) Financing Activities in case of (a) a Financial Enterprise, and (b) a Non-Financial Enterprise:
1. Purchase of securities fo a company.
2. Brokerage paid for the purchase fo securities.
3. Sale of securities of a Company.
4. Loans and advances made.
5. Receipts from the repayments of loans and advances.
6. Interest received on securities.
7. Dividend received on securities.
8. Interest paid on borrowings.
9. Dividend paid to shareholders.

When a fixed asset is bought as hire purchase, interest element is classified under ___.

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When the instalment paid in respect of a fixed asset acquired on deferred payment basis includes both interest and loan, the interest element is classified under _________ activities.

The correct option is C Financing When the instalment paid in respect of a fixed asset acquired on deferred payment basis includes both interest and loan, the interest element is classified under financing activities.

The correct option is C
Financing

When the instalment paid in respect of a fixed asset acquired on deferred payment basis includes both interest and loan, the interest element is classified under financing activities.