Practicing Success
Which of the following is considered as financial activity for both Financial company as well as non financial company? |
Payment of Interest On borrowings Payment of Dividend None of 1 or 2 All of the above |
Payment of Dividend |
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. 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. |