Final answer:
Interest revenue is recorded in the operating activities section of the Statement of Cash Flows because it relates to the principal revenue-producing activities of the entity. The correct option is B.
Step-by-step explanation:
The student's question pertains to which section of the Statement of Cash Flows (SOCF) would record the receipt of interest revenue. According to accounting principles, the interest revenue is typically considered part of operating activities. This is because it is related to the principal revenue-producing activities of the entity, which involve the production and delivery of goods for sale and the providing of services. As such, the inflow from interest revenue would be classified in the operating activities section of the SOCF.
The inflow or outflow from receipt of interest revenue belongs to the Investing activities section of the Statement of Cash Flows (SOCF).
This section focuses on the cash flows related to the acquisition and disposal of long-term assets such as investments in stocks and bonds, loans, and other financial instruments.
Interest revenue, being an income generated from investing activities, is classified under this section.