Question : Interest paid by an investment company will come under which kind of activity while preparing. Cash-flow statement?
Option 1: Operating Activities
Option 2: Investing Activities
Option 3: Financing Activities
Option 4: None of the above
Correct Answer: Operating Activities
Solution : Answer = Operating Activities
Interest paid by the investing company will come under the heading of operating activities because operating activities are the principal revenue-producing activities of the enterprise. This is because it relates to the day-to-day operational expenses of the company, such as interest on loans or bonds. Hence, the correct option is 1.
Question : While preparing Cash Flow Statement what type of activity is, 'Payment of Cash to acquire Debentures by an Investment company'?
Question : Interest received and paid' is considered as which type of activity by a finance company while preparing a Cash Flow Statement.
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