Like U.S. GAAP, international standards also require a statement of cash flows. Consistent with U.S GAAP, cash flows are classified as operating, investing, or financing activities. However, with regard to interest and dividend inflows and outflows, the international standard for cash flow statements:
A)Allows companies to report cash outflows from interest payments as either operating or investing cash flows.
B)Allows companies to report cash inflows from interest and dividends as either operating or investing cash flows.
C)Allows companies to report dividends paid as either investing or operating cash flows.
D)Designates cash outflows for interest payments and cash inflows from interest and dividends received as operating cash flows.

Question

Quizplus · Accepted Answer

The international standard for cash flow statements allows companies to report cash inflows from interest and dividends as either operating or investing cash flows. This provides flexibility for companies in classifying these cash flows based on their business operations and strategies. However, cash outflows for interest payments are generally classified as operating cash flows, consistent with U.S. GAAP.

Like US GAAP, International Standards Also Require a Statement of Cash