Interest expense is reported as a non-operating item on a multistep income statement, but it is reported in the operating activities section of the statement of cash flows.

Question

Quizplus · Accepted Answer

Interest expense is considered a non-operating item on the income statement because it is not part of the core business operations. However, it is included in the operating activities section of the cash flow statement because it affects net income, which is the starting point for calculating cash flows from operating activities.

Interest Expense Is Reported as a Non-Operating Item on a Multistep