Question

We report Interest paid on Bonds Payable or Notes Payable in the Operating Activities Section of the Statement of Cash Flows rather than in the Financing Activities Section of the Statement of Cash Flows.

-True
-False

Answer 1

Interest paid on Bonds Payable or Notes Payable is reported in the Financing Activities section of the Statement of Cash Flows, not the Operating Activities section.

Step-by-step explanation:

The statement, False. Interest paid on Bonds Payable or Notes Payable should be reported in the Financing Activities section of the Statement of Cash Flows, not the Operating Activities section. In the Operating Activities section, we report cash flows related to the company's day-to-day operations, such as revenue from sales and expenses like salaries and rent.