18. Cash interest from investments is recorded as _______ in statements of cash

Question

18. Cash interest from investments is recorded as _______ in statements of cash flows for U.S. GAAP, but can be recorded as ________ when using IFRS.

a. cash flows from investing activities / cash flows from financing activities

b. cash flows from financing activities / cash flows from operating activities

c. cash flows from operating activities / cash flows from financing activities

d. cash flows from operating activities / cash flows from investing activities

19. The balance sheet provides information on all of the following except:

a. how management invested its money.

b. assessing rates of return.

c. the market price of the company’s stock.

d. where the money came from.

Explanation / Answer

Under US GAAP, interest income received is mandatorily shown as cash flow from investing activities

However, under IFRS, interest income received can be shown as cash flow from operating activities or cash flow from financing activities

Correct choice A

19) Balance sheet can provide the information on the money invested by management, assessment of returns and the source of money

However balacne sheet does not provide market value of a stock

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