Question

Interest collected and principal collected on a note receivable are examples of an investing activity. (answer True or False)

Answer 1

Interest collected and principal collected on a note receivable are examples of an investing activity -

True

Explanation -

Principal amount of note receivable are part of cash flows from investing activities if it is long term notes receivable. And interest received are part of cash flows from operating or can be shown as investing activities depends on type of company.

So the given statement that interest and principal of note receivable are part of investing activities is true as investing activities include sale and purchase of property, plant and equipment, loan receivable and long term notes receivable.