Which of the Following Would Be Included in the "Cash

question 31

Multiple Choice

Which of the following would be included in the "cash flow from operating activities" section of the statement of cash flows?

• A)Accrual of salary expense at year-end.
• B)Cash paid for interest on a note payable.
• C)Payments of cash dividends to the owners of the business.
• D)Purchase of equipment for cash.

---

Definitions:

Direct Write-off Method

An accounting method for uncollectible receivables where the specific account's balance is directly removed from accounts receivable.

Allowance Method

A technique in accounting used to adjust accounts receivable for the amount estimated to be uncollectible.

Bad Debts

Accounts receivable that are considered uncollectible, representing losses to the company.

Accounts Receivable Turnover

Accounts Receivable Turnover is a financial metric that measures how efficiently a company collects cash from its credit sales, calculated by dividing total credit sales by the average accounts receivable during a period.