If a company uses the effective interest rate method, the amount of the cash flo

Question

If a company uses the effective interest rate method, the amount of the cash flow from operating activities will be

If a company uses the effective interest rate method, the amount of the cash flow from operating activities will be

A)the same as it would have been had the company used the straight-line method. B)more than it would have been had the company used the straight-line method. C)less than it would have been had the company used the straight-line method. D)None of the answers is correct.

Explanation / Answer

My answer is option(d) as the interest of paid have impact on financing activities and if earned have impact on investing activities but have no impact on operating activities no matter what method may be used.

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