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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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.
Please get back to us for any query
Keep posting
Regards