The receipt of interest on loans would be reported on a statement of cash flows,prepared by the direct method,under:
A)operating activities.
B)investing activities.
C)financing activities.
D)noncash activities.

Question

Quizplus · Accepted Answer

Interest received on loans is considered part of operating activities because it is related to the main activities of the business. The direct method of preparing a statement of cash flows reports cash inflows and outflows from operating activities separately. Therefore, interest received on loans would be reported as a cash inflow in the operating activities section.

The Receipt of Interest on Loans Would Be Reported on a Statement