|Author||Topic: Financial Stmt question|
|Manufacturing company earns interest from fixed deposit in a bank, can they consider this to be part of the trading profit?
a) Yes, because it is an earning to the company
b) Yes, because cash is a current asset
c) No, because deposit interest is not generated by the main activity of the company
d) No until it is withdrawn from the bank account.
Anyone can help? Tks!
|Answer is A
interest income is classified under operating activities in statement of cash flows.
|Thank u again!|