Commerce Exam > Commerce Questions > Interest received on investment will be______...
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Interest received on investment will be___________
- a)Added (Investing activities)
- b)Deducted (Investing activities)
- c)Deducted (Financing Activities)
- d)Added (Financing Activities)
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Interest received on investment will be___________a)Added (Investing a...
Interest received on investment is a revenue receipt and added in investing activities while preparing cash flow statement.
This question is part of UPSC exam. View all Commerce courses
Most Upvoted Answer
Interest received on investment will be___________a)Added (Investing a...
Interest received on investment will be added to investing activities. This is because investing activities involve the acquisition and disposal of long-term assets and other investments. Interest received on investments is an inflow of cash and is therefore considered a cash flow from investing activities.
Explanation:
Investing activities involve the purchase and sale of long-term assets, property, plant, and equipment, and other investments. These activities are reported in the cash flow statement under the investing activities section. The cash inflows and outflows from investing activities are reported separately from the cash flows from operating activities and financing activities.
Interest received on investments is a cash inflow that is generated from investing activities. This is because it represents the return on investment made by the company. Interest income is generated from investments such as bonds, debentures, fixed deposits, mutual funds, and other securities.
In the cash flow statement, interest received on investments is reported as a cash inflow under the investing activities section. The amount of interest received is added to the cash flows from investing activities to arrive at the net cash flow from investing activities.
Conclusion:
In conclusion, interest received on investments is added to investing activities in the cash flow statement. This is because it represents a cash inflow generated from investments made by the company. The cash inflows and outflows from investing activities are reported separately from the cash flows from operating activities and financing activities.
Explanation:
Investing activities involve the purchase and sale of long-term assets, property, plant, and equipment, and other investments. These activities are reported in the cash flow statement under the investing activities section. The cash inflows and outflows from investing activities are reported separately from the cash flows from operating activities and financing activities.
Interest received on investments is a cash inflow that is generated from investing activities. This is because it represents the return on investment made by the company. Interest income is generated from investments such as bonds, debentures, fixed deposits, mutual funds, and other securities.
In the cash flow statement, interest received on investments is reported as a cash inflow under the investing activities section. The amount of interest received is added to the cash flows from investing activities to arrive at the net cash flow from investing activities.
Conclusion:
In conclusion, interest received on investments is added to investing activities in the cash flow statement. This is because it represents a cash inflow generated from investments made by the company. The cash inflows and outflows from investing activities are reported separately from the cash flows from operating activities and financing activities.
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Interest received on investment will be___________a)Added (Investing activities)b)Deducted (Investing activities)c)Deducted (Financing Activities)d)Added (Financing Activities)Correct answer is option 'A'. Can you explain this answer?
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