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Hello Crish, I hope you are doing well. I am so far loving your lectures. I stuck at a line you said, ” Intrest received and dividend received are invenstment incoe and it would need to be adjusted for any opening or closing receivables in a T-account” . There are quite high chances i mishead it. and i am aware cashflows are not frequently examined. but I am losing my mind over it like i will mess up at this very point if t will be exmained ever.
I didn’t understand how interst income has to do with receivables and how it would appear in a t-account ?
yeah intrest payable T account is needed to find the interst paid during the year in cash but i didmn’t understand that about intrest receivable or Dividend receivable.
All i can make up is , sum of dividend and intrest received would be “investment income” and it would appear in operating activities just after PFY.
thank you very much for being here.
Ohh i understood, the dividend receivable is to check if there is any dividend receviable balance in current assest ( like we check for intrest payable in current liability ) to see if we received any dividend through T account, I don’t know why it didn’t hit me earlier, in example video it is cleared now.
I am more than happy if you want to add anything to it.
Thank you very much Sir
Correct! We are adjusting the income in profit or loss for any opening/closing balances. As you say, cashflow is not now tested as a full question and if it is seen then it will be in section A or B, so only worth a handful of marks. That said, it is still worth investing a bit of time in the section in case it does arise as it is usually some easy marks to achieve.
Thanks and I hope you continue to enjoy the lectures. Looking forward to helping you out in the coming months.