how is rent paid treated in cash flow and under which activity???

Dear Student

Rent Paid is treated as an operating activity as it is directly related to the business. As it is an operating activity , the effect of rent paid is already accounted in cash flow statement by way of Net profit Before Taxes.

Therefore for the rent paid their is no treatment in Cash flow statement. However if their is any unpaid rent which is outstanding debited in profit and loss account , then such unpaid rent would be adjusted in Operating activity in cash flow statement.

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  • 16
Rent paid is an operating activity, so we dont use it any where in cas flow as the profit which we have taken is profit after these appropriations suggesting that these items had already been deducted ....
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