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Question : Fardeen Ltd. received interest on an item and the accountant classified it unde Investing Activity while preparing Cash Flow Statement. Name another item for which such a treatment is possible.

Option 1: Dividend paid

Option 2: Dividend received

Option 3: Issue of equity shares

Option 4: Interest on call - in arrear


Team Careers360 22nd Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Dividend received


Solution : Answer = Dividend received

Interest received on investments is typically classified as an investing activity in the Cash Flow Statement. Similarly, dividends received, being an income from investments, can also be classified as an investing activity. Both involve returns earned from investments made by the company, hence they fall under the investing category.
Hence, the correct option is 2.

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