Cash receipts from interest on a note receivable would be classified on the statement of cash flows in the:
A)operating activity section.
B)investing activity section.
C)financing activity section.
D)noncash financing and investing section.

Question

Quizplus · Accepted Answer

Cash receipts from interest on a note receivable would be classified as operating cash flows because they are directly related to the main operations of the business. The operating activity section of the statement of cash flows reports inflows and outflows of cash from revenue and expense transactions. Interest is considered a revenue item, and as such, is classified as an operating activity.

Cash Receipts from Interest on a Note Receivable Would Be