Why interest received on loan given to a person is considered as investing activity as loan given to a person is not an any kind of investment by a company?


Any income earned from business assets is categorised under 'Investing Activity'.

Loan given is an asset for the business and so interest received on loans granted is classified under ​'Investing Activity'.

Likewise, if any rent is received from letting out a building, then such rent will also be classified under ​'Investing Activity'.

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