Which of the Following Would Not Appear in the Operating

question 11

Multiple Choice

Which of the following would not appear in the operating activities section of a statement of cash flows prepared under the direct method?

• A) Cash receipts from customers
• B) Cash paid for income taxes
• C) Gain on sale of equipment
• D) Cash paid to employees

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Definitions:

Providing Services

The act of performing tasks or duties, usually professional in nature, for another party in exchange for compensation.

Real Estate Brokerage

A firm or individual who acts as an intermediary between sellers and buyers of real estate, often licensed to manage, negotiate, and arrange sales under the laws of their jurisdiction.

Nontrading Partnership

A type of partnership that engages in activities other than the buying and selling of goods, often focusing on services or other ventures.

Cash Flow Problems

Financial issues that occur when a business does not have enough cash to meet its short-term liabilities and operating expenses.