Accounts Receivable Arising from Sales to Customers Amounted to $35,000

question 43

Multiple Choice

Accounts receivable arising from sales to customers amounted to $35,000 and $40,000 at the beginning and end of the year, respectively.Profit reported on the income statement for the year was $120,000.Ignoring the effect of any other adjustments, the cash flow provided (used) by operating activities, prepared using the indirect method, is

• A)$120,000.
• B)$125,000.
• C)$155,000.
• D)$115,000.

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Definitions:

Sales Collected

The actual revenue received from customers, including cash sales and collections on account receivables.

Raw Materials Inventory

The total cost or value of all the raw materials that are to be used in production and are currently stored in inventory.

Raw Materials Production Needs

The quantity and type of raw materials required to meet production targets based on the designed product and manufacturing processes.

Raw Materials Cost

The expense associated with acquiring the unprocessed materials required in the manufacture of products.