Collections from Customers Are Cash Flows from Operating Activities

question 38

True/False

Collections from customers are cash flows from operating activities.

---

Definitions:

Matching Principle

An accounting concept that dictates expenses should be recorded in the same period as the revenues they help to generate, ensuring accurate financial reporting.

Uncollectible Receivables

Debts owed to a company that are considered unlikely to be paid and are thus written off as a loss.

Notes Receivable

Claims against debtors created through formal instruments of credit that serve as proof of intent to pay.

Accounts Receivable

Money owed to a company by its debtors, representing funds due for goods or services that have been delivered but not yet paid for.