A Company Uses the Direct Method to Prepare the Statement

question 76

Multiple Choice

A company uses the direct method to prepare the statement of cash flow computes the amount of cash it receives from customers as

• A)cost of goods sold plus ending inventory minus beginning inventory.
• B)cost of goods sold minus ending inventory plus beginning inventory.
• C)sales revenue plus the decrease (or minus the increase)in accounts receivable.
• D)sales revenue minus the decrease (or plus the increase)in accounts receivable.