When using the direct method to determine operating cash flows, how 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
E)not reported on the statement of cash flows

Question

Quizplus · Accepted Answer

Cash collected from customers is a result of the company's main operations and is therefore categorized as an operating activity on the Statement of Cash Flows.

When Using the Direct Method to Determine Operating Cash Flows