If a company borrows money from a bank, the interest paid on this loan should be reported on the statement of cash flows as a(n):
A) Operating activity.
B) Financing activity.
C) Investing activity.
D) This is not reported in the statement of cash flows.
E) Noncash investing and financing activity.

Question

Quizplus · Accepted Answer

Interest paid on a loan is considered an operating activity on the statement of cash flows because it relates to the company's primary revenue-generating activities.

If a Company Borrows Money from a Bank, the Interest