Interest expense appears in the operations section of the cash-flows statement because:

Question

Quizplus · Accepted Answer

Interest expense is a financial cost that a company incurs to meet its financial obligations. It is not within the managerial discretion as it is tied to the company's debt level and lenders' terms. Interest expenses are directly related to financing activities, and that's why they appear in the financing section of the cash flow statement.

Interest Expense Appears in the Operations Section of the Cash-Flows