Final answer:
The assertion that interest income and dividend income are always considered cash flows from investing activities according to U.S. GAAP is false. Classification depends on the context of the income. Option B
Step-by-step explanation:
The statement regarding interest income and dividend income being considered cash flows from investing activities according to U.S. GAAP is false. In financing and reporting activities, these types of income are typically classified differently.
Interest income is generally reported as an operating activity, whereas dividend income can be considered an operating activity if the dividends are received from investments related to the company’s main operations. If dividends are received from investments that are not related to the company’s main operations, then they are classified as investing activities.
It's important to carefully consider the context in which these incomes arise to accurately classify them. For example, interest income earned on securities purchased as part of a company’s cash management strategy would be considered an operating activity, while interest income from a long-term loan provided to another entity could be reported as an investing activity. Option B