Question

while preparing cash flow statement the repayment of a loan during the Year should be included under the heading of

Answer 1

Heya user!



It will come under liability.

Answer 2

The repayment of loan is shown under the head of Financing Activity.

But it should be noted that this is only applicable if the loan is repaid in terms of cash, or the repayment of loan results in the cash outflow.

For this, the loan has to be split in two parts i.e. the principal amount and interest to be paid.

The principal amount is shown under the head of Financing Activity and the interest could be shown either under the head of Financing Activity or under the head of Operating Activity.