Interest paid by a financial company will come under which kind of activity while preparing a cash flow statement?
Answer & explanation
Correct answer: option 3
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.