In case of a financial enterprise, interest paid is classified under which activity while preparing Cash Flow Statement.
(
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Shift 07/06/2023 3:30 PM - 6:30 PM
A
Operating activity
B
Financing activity
C
Investing activity
D
Inflow activity
Correct Answer
Operating activity
Detailed Explanation
In the context of a financial enterprise, interest paid is typically considered an operating expense. This is because it is a regular, recurring cost associated with the core operations of the financial institution. Interest paid by financial enterprises can include the interest on deposits, loans, or bonds issued by the institution.
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