Under the direct method of determining the net cash provided by (used in) operating activities on the statement of cash flows, an increase in accounts receivable would be added to sales revenue to convert revenue to a cash basis.

Question

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Under the direct method, an increase in accounts receivable would be subtracted from sales revenue to convert revenue to a cash basis, as it represents sales that have not yet been collected in cash.

Under the Direct Method of Determining the Net Cash Provided