On 31st March, 2019, X Ltd. has 8% fixed Deposit (Date of FD 1 st March, 2019, maturing on 31 st May, 2019) of ₹3,00,000. Interest is received on monthly basis. While preparing Cash Flow Statement as per AS-3:

CS Executive · Corporate and Management Accounting · PYQS · December 2020
On 31st March, 2019, X Ltd. has 8% fixed Deposit (Date of FD 1 st March, 2019, maturing on 31 st May, 2019) of ₹3,00,000. Interest is received on monthly basis. While preparing Cash Flow Statement as per AS-3:
(A) ₹2,000 (interest) will be added to net profit while calculating net cash inflow after tax from operating activities
(B) ₹3,00,000 will be treated as cash outflow in investing activities
(C) Both (A) and (B)
(D) None of the above

Answer & Explanation:

Correct Answer: Option (D)

Official answer key: (D).

Topics: Financial Accounting

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