When using the direct method,how is the collection of cash from customers shown on the statement of cash flows?
A)As an operating activity
B)As an investing activity
C)As a financing activity
D)As a noncash investing and financing activity

Question

Quizplus · Accepted Answer

Cash collected from customers is considered an operating activity because it relates to the primary operations of the business. The direct method of presenting cash flows from operating activities involves showing cash inflows and outflows related to operating activities, and the collection of cash from customers would be included as an inflow.

When Using the Direct Method,how Is the Collection of Cash