GAAP requires that cash paid for interest on a note payable is always recorded in the operating activities of the cash flow statement.

Name: GAAP requires that cash paid for interest on a note payable is always recorded in the operating activities of the cash flow statement.
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Question

Quizplus · Accepted Answer

Under GAAP (Generally Accepted Accounting Principles), cash paid for interest on a note payable is classified as an operating activity, reflecting the cost of borrowing as part of the company's ongoing operational expenses.

GAAP Requires That Cash Paid for Interest on a Note