Accounts Receivable Arising from Sales to Customers Amounted to $120,000

question 202

Multiple Choice

Accounts receivable arising from sales to customers amounted to $120,000 and $105,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $407,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

• A) $407,000.
• B) $422,000.
• C) $512,000.
• D) $392,000.

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Definitions:

Par Common Stock

Common stock issued with a nominal value expressed in the corporate charter, which represents the stock's legal capital per share.

Market Price

The prevailing market price at which you can buy or sell an asset or service.

Cumulative Preferred Stock

A type of preferred stock that entitles shareholders to receive dividends in arrears before common stockholders can be paid dividends.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on part of the corporation's profits or losses.