Question

Classify the following activity into operating activities, investing activities, financing activities or cash activities

"Interest and Dividend received": In case of a financial enterprise (whose main business is lending and borrowing)

Options

• Operating activities

• Investing activities

• Financing activities 

• Cash activities

Answer 1

Operating activities

Explanation:

Interest paid, interest received, and dividend received are classed as operating activities in a financial organization (whose main business is lending and borrowing), whereas dividend paid is classified as a financing activity.