Interest income is recorded as an investing inflow of cash.

Name: Interest income is recorded as an investing inflow of cash.
Brand: Quizplus
Rating: 4.7 (51 reviews)

Question

Quizplus · Accepted Answer

Interest income is earned from investments made by the company, such as bonds, savings accounts, or loans to other businesses. Since investing activities involve the acquisition and disposal of long-term assets, any interest earned from these assets is considered an investing inflow of cash. Therefore, it is recorded in the statement of cash flows under the investing section.

Interest Income Is Recorded as an Investing Inflow of Cash