Is finance cost a non operating exxpenses??
explain the treatment of finance cost in cash flow question 49
https://www.meritnation.com/cbse/class12-commerce/textbook-solutions/accountancy/ts-grewal-ii-(2014)/cash-flow-statement/page5.101-practical-problems-qno49/1338_6925_31834/
Dear Student,
In question 49 of T.S Grewal 2014 Edition, Finance Cost are added to Net Profit before Taxation and Extraordinary Items (under Cash Flow from Operating Activities) because while preparing Profit and Loss A/c it was subtracted from Net Profit.
Further, it is a financial expense belonging to non-operating expenses, therefore, subtracted from the appropriate head (Financing Expenses) in the Cash Flow Statement.
Keep posting for further doubts!!
In question 49 of T.S Grewal 2014 Edition, Finance Cost are added to Net Profit before Taxation and Extraordinary Items (under Cash Flow from Operating Activities) because while preparing Profit and Loss A/c it was subtracted from Net Profit.
Further, it is a financial expense belonging to non-operating expenses, therefore, subtracted from the appropriate head (Financing Expenses) in the Cash Flow Statement.
Keep posting for further doubts!!