Using the Direct Method of Preparing the Statement of Cash

question 151

Multiple Choice

Using the direct method of preparing the statement of cash flows,which of the following is not an activity generating operating cash flows?

• A)Collections from customers
• B)Collection of notes receivable
• C)Payments for income taxes
• D)Payments to employees

Recognize the impact of credit card sales on receivables.

Understand the significance of formal instruments of credit, such as notes receivable.

Learn the accounting treatment for the write-off of uncollectible accounts.

Grasp the principles behind the valuation and reporting of receivables in financial statements.

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Definitions:

Cost

The monetary value incurred in the production of goods and services, including materials, labor, and overhead expenses.

Raw Materials

Basic materials that are used in the production process to create finished goods, often reflecting a significant portion of manufacturing costs.

Accounts Payable

Liabilities owed by a business to creditors for goods and services purchased on credit.

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.