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Question
Interest received on Calls-in-Arrears by any company will be shown as ______.
Options
Operating Activity
Investing Activity
Financing Activity
General Activity.
MCQ
Fill in the Blanks
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Solution
Interest received on Calls-in-Arrears by any company will be shown as financing activity.
Explanation:
Calls-in-Arrears represent unpaid amounts due from shareholders on the shares allotted to them, which directly relates to the company’s equity capital structure. Since the underlying shares belong to financing activities, any interest charged or received on those arrears by the company is treated as income generated from its financing arrangements. Therefore, it is classified as a cash inflow under Financing Activities.
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