On the statement of cash flows, the operating activities section prepared using the direct method would include
A)receipts from the issue of common shares.
B)receipts from the sale of investments.
C)payments for the acquisition of investments.
D)cash receipts from sales activities.

Question

Quizplus · Accepted Answer

The operating activities section of the statement of cash flows, when prepared using the direct method, includes cash transactions directly related to the company's primary revenue-generating activities, such as cash receipts from sales activities. Receipts from the issue of common shares pertain to financing activities, while receipts from and payments for the acquisition of investments are considered investing activities.

On the Statement of Cash Flows, the Operating Activities Section