Under the indirect method, interest on debentures charged in the Statement of Profit and Loss is added back while computing operating cash flow (since it is a non-operating expense). The actual interest paid is then shown as a cash outflow under financing activities. Hence, it is added in operating and subtracted (outflow) in financing.
Interest paid on debentures by a manufacturing company would be
CUET UG 2022 — Accountancy Financial Statements
2022mcqmedium
Interest paid on debentures by a manufacturing company would be
Official previous-year question
Held on 15 Jul 2022 · Verified 13 Jul 2026.
Options
- A
Added in Operating activities and subtracted from Financing activities
- B
Added in Investing activities and subtracted from Operating activities
- C
Added in Financing activities and subtracted from Investing activities
- D
Added in Cash and Cash equivalent
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