In a statement of cash flows, interest payments to lenders and other creditors should be classified as cash outflows for
A) operating activities.
B) borrowing activities.
C) lending activities.
D) financing activities.

Question

Quizplus · Accepted Answer

Interest payments to lenders and other creditors are classified as cash outflows for operating activities in a statement of cash flows. This is because they are considered part of the day-to-day operations that affect the net income of the company.

In a Statement of Cash Flows, Interest Payments to Lenders