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Question : Kunal Ltd under which activity will the amount of interest paid on a debentures settled in the current year be shown?

Option 1: Investing Activities

Option 2: Financing Activities

Option 3: Both investing and Financing Activities

Option 4: Operating Activities


Team Careers360 7th Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: Financing Activities


Solution : Answer = Financing activities

Interest paid on debentures is a financing activity because it involves payments related to obtaining financial resources for the company. Financing activities involve raising capital and repaying debts, which includes paying interest on debentures. Therefore, the amount of interest paid on debentures will be shown under financing activities in the cash flow statement.
Hence, the correct option is 2.

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