Under the direct method, cash receipts from dividend revenue affect both the statement of cash flows and the income statement.

Question

Quizplus · Accepted Answer

Under the direct method, cash receipts from dividend revenue are reported as operating cash inflows on the statement of cash flows, and are also included in the calculation of net income on the income statement. This is because dividends are considered to be a normal source of operating revenue for a company.

Under the Direct Method, Cash Receipts from Dividend Revenue Affect