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    • Question

      A company takes a bank loan of ₹10,00,000 at 10%

      interest. Interest for the year is ₹1,00,000. Where is interest shown in financial statements?
      A As financing cash inflow in cash flow statement Correct Answer Incorrect Answer
      B As financing cash outflow in cash flow statement and finance cost in P&L Correct Answer Incorrect Answer
      C As investing cash flow only Correct Answer Incorrect Answer
      D As current asset Correct Answer Incorrect Answer
      E Off-balance sheet Correct Answer Incorrect Answer

      Solution

      Interest paid is often shown under operating or financing depending on policy; finance cost shown in P&L. (Under Ind AS many present interest paid under operating unless capitalized.)

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