When Using the Direct Method,which of the Following Should Be

question 46

Multiple Choice

When using the direct method,which of the following should be reported as a source of cash from operating activities?

• A)Credit sales
• B)Depreciation expense
• C)Collections from customers
• D)Sale of a building
• E)Sale of treasury shares

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Definitions:

Comparative Advantage

The ability of a country, individual, company, or region to produce a good or offer a service at a lower opportunity cost than competitors.

Capital

Resources made and used by people to produce and distribute goods and services, including buildings, machinery, tools, and equipment.

Investment

Utilization of resources (such as capital, time, or effort) with the expectation of achieving a future return, often through the acquisition of assets or improvement of productivity.

Inefficiency

The state of not achieving maximum productivity; failing to make the best use of time, resources, or energy.