Which of the Following Statements Is True Concerning How Interest

question 4

Multiple Choice

Which of the following statements is true concerning how interest paid on debt is classified on the cash flow statement for U.S.GAAP and International Financial Reporting Standards IFRS) ?

• A)It is a cash from operations for both.
• B)It is a cash from financing activities from both.
• C)It may be classified as either a cash from operations or a cash from financing activities for U.S.GAAP.
• D)It may be classified as either a cash from operations or a cash from financing activities for IFRS.

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Definitions:

Net Income

Net Income is the total profit of a company after all expenses and taxes have been deducted from revenue.

Variable Costs

Costs that vary in proportion to the level of production or business activity.

Fixed Costs

Expenses that do not change with the amount of goods or services produced over a short period.

Variable Costs

Costs that vary directly with the level of production or service provision.