Economics · Accounting
In the preparation of a Cash Flow Statement according to Accounting Standard 3 (AS 3) for a commercial bank, how should the following transactions be categorized: interest received on loans (₹500 Crore), interest paid on deposits (₹200 Crore), purchasing new computer servers (₹50 Crore), and dividends paid to shareholders (₹30 Crore)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Interest received is Operating, interest paid is Financing, server purchase is Investing, and dividends are Operating.
- 2All interest related items and server purchases are Operating activities while only dividends are Financing.
- 3Interest received and paid are Operating activities, server purchase is Investing, and dividends are Financing.✓
- 4Interest received and paid are Investing activities, server purchase is Financing, and dividends are Operating.
Correct answer
Interest received and paid are Operating activities, server purchase is Investing, and dividends are Financing.
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