Presented Below Is the Operating Activities Section of the Statement

question 82

Multiple Choice

Presented below is the operating activities section of the statement of cash flows for Feline Friends Corp.for 2016: $$\begin{array}{l}\text { Operating activities: }\\\begin{array} { l r } \text { Cash collected from customers } & \$ 165,000 \\\text { Cash payments for merchandise } & ( 83,000 ) \\\text { Cash payments for operating expenses } & \underline { ( 58,000 ) } \\\text { Net cash inflow from operating activities } & \underline { \$ 24,000 }\end{array}\end{array}$$ Which method of preparing the operating activities section has Feline used?

• A) The direct method
• B) The indirect method
• C) Either method
• D) Cannot be determined without further information

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Definitions:

Accounts Collection

The process of pursuing payments of debts owed by individuals or businesses.

Actual Authority

The express or implied legal power granted by a principal to an agent to carry out specific tasks on the principal's behalf.

Real Estate Broker

A licensed individual or firm that acts as an intermediary between sellers and buyers of real estate.

Contract Sale

An agreement between a buyer and a seller where the payment for goods or services is extended over a period, often related to real estate transactions.