Which of the Following Items Does Not Appear in the Statement

question 196

Multiple Choice

Which of the following items does not appear in the statement of cash flows under the direct method?

• A) Cash payments to suppliers
• B) Cash collections from customers
• C) Depreciation Expense
• D) Cash from the sale of equipment

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Definitions:

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.

Installment Contracts

Agreements where payments are made in a series of increments over time in exchange for goods or services.

Conditional Sales Contract

A contract agreement where the buyer takes possession of an item, but its formal ownership and title remain with the seller until the purchase price is paid in full.

Machinery

Physical devices or machines, often powered, that are used in manufacturing processes or to perform various tasks in industries.