A not-for-profit hospital pays $150,000 interest on its bonds outstanding. The bonds were issued to finance construction of a new hospital wing. In its statement of cash flow, the interest should be shown as a cash outflow from

a. noncapital financing activities

b. capital financing activities

c. operating activities

d. investing activities

Question

Business

Barrett Coleman

30 March, 01:20

A not-for-profit hospital pays $150,000 interest on its bonds outstanding. The bonds were issued to finance construction of a new hospital wing. In its statement of cash flow, the interest should be shown as a cash outflow from

a. noncapital financing activities

b. capital financing activities

c. operating activities

d. investing activities

+2

Answers (1)

Know the Answer?

Izabella Horton · Answer 1

c. operating activities

Explanation:

Operating activities -

It is the activity of the functions of the business which is directly linked via providing the respective services and goods in the market, is known as operating activities.

It is the core business activity of the company, like the marketing, distributing, selling the services or goods and manufacturing.

It is responsible for the majority of the cash flow within the company.

Hence, from the question, the correct term according to the given data is c. operating activities.