For each item listed below, identify how it will be reported on the Statement of Cash Flows under the indirect method.
-Write-off of a customer's account receivable under the allowance method
A)Operating activity
B)Investing activity
C)Financing activity
D)Not reported separately on the cash flow statement

Question

Quizplus · Accepted Answer

The write-off of a customer's account receivable under the allowance method is a non-cash transaction that affects only the balance sheet accounts (Accounts Receivable and Allowance for Doubtful Accounts) and does not impact the cash flow directly. Therefore, it is not reported separately on the Statement of Cash Flows.

For Each Item Listed Below, Identify How It Will Be