The Reporting Format for the Statement of Cash Flows Which

question 90

Multiple Choice

The reporting format for the statement of cash flows which shows the actual cash inflows and outflows of operating activities is the:

• A)direct format
• B)indirect format
• C)noncash format
• D)allowance format

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Definitions:

Bad Debt Expense

An expense recorded to account for receivables that are expected not to be collected.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services that have been delivered or used but not yet paid for.

Net Sales

The total revenue a company generates from sales after subtracting returns, allowances, and discounts.

Increase in Accounts Receivable

A situation where the amount of money owed by customers to a company grows due to sales on credit outpacing payments received.