Read the following information to answer.

On the basis of case study given below, answer the question which follows:
"Mikku on alumni of IIT Delhi initiated his start-up "Gajanan Lid.," in the year 2016. His profit in the year 2020-21 after all appropriation was ₹6,25,000. This profit was arrived after taking the following items into consideration:

From among the following, choose the item which would be mentioned in financing activity also:

Interest on Debenture

The correct answer is option 2- Interest on Debenture.

Interest on Debenture would be mentioned in financing activity also.

In case of a non-financial enterprise, as per AS-3, it is considered more appropriate that payment of interest and dividends are classified as financing activities whereas receipt of interest and dividends are classified as investing activities.