why loan is given in both financial as well as investment activities ?
Dear Student,
Paavan is correct. When Loan is granted to others, it becomes the asset of the company. So, it is categorised as an investment and therefore forms part of investing activities.
However, when loan is received by the company, it comes with an obligation to re-pay so it is categorised as a financing activity.
Hope this answers your query.
Keep posting!!
Paavan is correct. When Loan is granted to others, it becomes the asset of the company. So, it is categorised as an investment and therefore forms part of investing activities.
However, when loan is received by the company, it comes with an obligation to re-pay so it is categorised as a financing activity.
Hope this answers your query.
Keep posting!!