In the “Cash flow from operating activities” topic, you add interest paid in the profit before tax. But in the book the “interest paid” is subtracted. What is the reason for this? Which one should I follow?
Ask the Tutor ACCA FA
Statement of Cash Flows
3y ago#1No. In arriving at the cash flow from operating activities we add back the interest expense that was charged in arriving at the net profit in order to arrive at the operating profit. We then subtract the interest that was paid in order to arrive at the cash flow from operating activities.
I don't know what book you are referring to, but I have no doubt that it does exactly what I have written above :-)
Are there videos to explain to me the the topic statement and cash flows?
3y ago#3Yes - there are video lectures covering all of the topics in the Paper FA exam syllabus!
You can find them linked from the main Paper FA page:
https://opentuition.com/acca/fa/
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