The major operating activity on the statement of cash flows that increases cash is ________.
A)sales on account
B)proceeds from sale of common stock
C)proceeds from issue of bonds payable
D)collections from sales to customers

Question

Quizplus · Accepted Answer

Collections from sales to customers are an operating activity that directly increases cash. This is because cash is received from customers as a result of selling goods or services, and is recorded as an increase in cash on the statement of cash flows. Sales on account, proceeds from the sale of common stock, and proceeds from the issue of bonds payable are all financing activities or investing activities, respectively, and may or may not result in an increase in cash depending on the circumstances.

The Major Operating Activity on the Statement of Cash Flows