Using the Direct Method
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
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When using the direct method, where is the collection of cash from customers shown on the statement of cash flows?
A) Operating activity
B) Investing activity
C) Financing activity
D) Noncash investing and financing activity

Question

Using the Direct Method 
For the following question(s), indicate how each transaction described would be classified on a statement of cash flows if the operating activities section is prepared under the direct method.
- 
When using the direct method, where is the collection of cash from customers shown on the statement of cash flows?
A) Operating activity
B) Investing activity
C) Financing activity
D) Noncash investing and financing activity

Quizplus · Accepted Answer

The collection of cash from customers is classified as an operating activity under the direct method on the statement of cash flows.