Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Interest received on loans and advances results in cash............... from.............activity in the cash flow statement of the company.

Options:

Outflow, financing

Inflow, financing

Inflow, investing

Outflow, investing

Correct Answer:

Inflow, investing

Explanation:

Cash Inflows from Investing Activities
* Cash receipt from disposal of fixed assets including intangibles.
* Cash receipt from the repayment of advances or loans made to third parties (except in case of financial enterprise).
* Cash receipt from disposal of shares, warrants or debt instruments of other enterprises except those held for trading purposes.
* Interest received in cash from loans and advances.
* Dividend received from investments in other enterprises.