Interest Paid on Debt Would Be Reported on a Statement

question 5

Multiple Choice

Interest paid on debt would be reported on a statement of cash flows under:

• A)the investing activities.
• B)the operating activities.
• C)the financing activities.
• D)no category, because interest paid on debt would not be reported on a statement of cash flows.

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Definitions:

Current Liability

Financial obligations that a company is required to pay within one year.

Advance From Customers

Money received by a company from customers before the related goods or services have been delivered.

GAAP

Generally Accepted Accounting Principles, a standard framework of guidelines for financial accounting.

Payroll Bank Account

A separate bank account used by businesses specifically for processing payroll transactions, ensuring that funds are available for employee wages and related taxes.