Under the direct method of preparing the statement of cash flows,cash receipts from operating activities do NOT include:
A)collection of note receivable.
B)collections from customers.
C)receipt of interest on investments.
D)receipt of dividends on investments.

Question

Quizplus · Accepted Answer

Collection of note receivable is a cash inflow from investing activities, not operating activities. The direct method only includes cash receipts from operating activities, such as collections from customers, receipt of interest on investments, and receipt of dividends on investments.

Under the Direct Method of Preparing the Statement of Cash