1.we have, interest accrual b/d 28 and c/d 6. why don't we adjust interest accrual in cash generated from operations? we deduct finance cost but isn't finance cost and interest accrual same????
2. where do we adjust that accruals value in cash flow??
3. while preparing cash flow from direct method, in payables control a/c, depn was deducted. why?
what else we need to deduct?
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cash flow
11y ago#1You will have to say which question you are writing about, otherwise it is impossible for me to answer.
1..given: 2006 2005
inventory 145 167
TR 202 203
TP 27 16
prepayments 196 212
interest accrual 6 28
operATING profit 469850
depn 37400
what is the cash generated from operations?
2. we have deposited 5000 in bank and we receive interest 100 yearly. so, where are we adjusting 100 in cash flow??under investing activities or under operating activities?
11y ago#3Have you actually watched the free lecture?
Operating profit is before charging the interest expense.
Interest paid comes below cash generated from operations on the statement of cash flows.
Interest received appears under cash flows from investing activities.
I go through all of this in the lecture.
1.we add investment income in operating activities. so can u give me examples of investment income ?
sir, are interest expense and interest paid different??
11y ago#5Investment income is interest received or dividends received.
Interest expense is the actual charge for the year. Interest paid is the cash actually paid.
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