Target Exam

CUET

Subject

-- Accountancy Part B

Chapter

Cash Flow Statement

Question:

Interest paid by a financial company will come under which kind of activity while preparing a cash flow statement?

Options:

Cash Flow from Investing Activities

Cash Flow from Financing Activities

Cash Flow from Operating Activities

No cash flow

Correct Answer:

Cash Flow from Operating Activities

Explanation:

The correct answer is option 3- Cash Flow from Operating Activities.

Interest paid by a financial company will come under Operating activity while preparing a cash flow statement.

In case of a financial enterprise (whose main business is lending and borrowing), interest paid, interest received and dividend received are classified as operating activities while dividend paid is a financing activity.