When using the direct method to determine the net cash flows from operating activities, major categories would include:
A) Cash received from bank.
B) Cash paid for salaries.
C) Cash paid for dividends.
D) Cash paid for equipment.

Question

Quizplus · Accepted Answer

The direct method for determining net cash flows from operating activities involves listing all the cash inflows and outflows from operational business activities. This includes cash received from customers and cash paid for expenses like salaries. Cash paid for dividends (financing activity) and cash paid for equipment (investing activity) are not included in the operating activities section.

When Using the Direct Method to Determine the Net Cash