Question:
Shyam Sunder Ltd. is a financing company. Under which of the following activity will the amount of ‘Interest paid on loan’ be shown:
Shyam Sunder Ltd. is a financing company. Under which of the following activity will the amount of ‘Interest paid on loan’ be shown:
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For non-financing companies, interest paid is classified as a financing activity. For financing companies, it falls under operating activities.
Updated On: Jan 13, 2026
- Investing activity
- Financing activity
- Both Financing \& Operating activity
- Operating activity
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Verified By Collegedunia
The Correct Option is D
Solution and Explanation
As per the AS-3 (Revised) guidelines, interest paid by a financing company is considered an operating activity because it directly relates to the core operations of the business.
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