Question

Which of the following categories of a statement of cash flows is affected by the payment of interest expense?

A.cash flows from inverstments
B.cash flows from financing
C.cash flows from operations
D.cash flows from noncash expenses

Answer 1

The payment of interest expense impacts the cash flows from operations section in the statement of cash flows, reflecting the cash outflow from the business's daily activities.

Step-by-step explanation:

The payment of interest expense affects the cash flows from operations category of a statement of cash flows. The statement of cash flows is divided into three main sections: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Interest expense is considered part of the operating activities because it relates to the core operations of a business. When a company pays interest, it is an outflow of cash from its day-to-day business, not linked to investment purchases or the acquisition of funding.