Questions: Companies may report interest recelved and dividends recelved as investing activities using: Multiple Choice Neither U.S. GAAP nor IFRS. Both U.S. GAAP and IFRS. IFRS. U.S. GAAP

The answer is IFRS.

Explanation for each option:

1. Neither U.S. GAAP nor IFRS: This option is incorrect because both U.S. GAAP and IFRS have specific guidelines on how to report interest received and dividends received, though they differ in their treatment.

2. Both U.S. GAAP and IFRS: This option is incorrect because, under U.S. GAAP, interest received and dividends received are typically classified as operating activities, not investing activities. However, IFRS allows for more flexibility.

3. IFRS: This is the correct answer. Under IFRS (International Financial Reporting Standards), companies have the option to classify interest received and dividends received as either operating or investing activities, depending on the nature of the transaction and the company's accounting policy.

4. U.S. GAAP: This option is incorrect because, under U.S. GAAP (Generally Accepted Accounting Principles), interest received and dividends received are generally classified as operating activities, not investing activities.

In summary, IFRS provides the flexibility to classify interest and dividends received as investing activities, whereas U.S. GAAP does not.