Under U.S.GAAP, the statement of cash flows classifies cash expenditures for interest expense as a(n) _____ activity and classifies cash expenditures to redeem debt as a(n) _____ activity.
A)financing; financing
B)financing: operating
C)operating; investing
D)operating; operating
E)operating; financing

Question

Quizplus · Accepted Answer

Cash expenditure for interest expense is considered an operating activity because it is related to the ongoing operations of the business. Cash expenditures to redeem debt are considered financing activities because they are related to the financing and capital structure of the business.

Under USGAAP, the Statement of Cash Flows Classifies Cash Expenditures for for Interest