Presented Below Is the Operating Activities Section of the Statement

question 150

Multiple Choice

Presented below is the Operating Activities section of the statement of cash flows for Feline Friends Corp.for 2017: $$\begin{array}{l}\text { Operating activities: }\\\begin{array} { l r } \text { Cash collected from customers } & \$ 165,000 \\\text { Cash payments for merchandise } & ( 83,000 ) \\\text { Cash payments for operating expenses } & \underline { ( 58,000 ) } \\\text { Net cash inflow from operating activities } & \$ 24,000\end{array}\end{array}$$ 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:

Premiums

Payments made for insurance coverage, often periodically to maintain the insurance policy.

Beneficiary

An individual or entity chosen to receive benefits or assets from a will, insurance policy, or trust.

Coinsurance

An insurance policy provision under which the insurer and the insured share costs, after the deductible is met, according to a specific formula.

Insured

A person or entity covered by an insurance policy, protecting them against financial loss from specified risks.