Under the direct method of preparing the statement of cash flows, the major source of cash receipts is cash received from the sale of property, plant and equipment.

Question

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The major source of cash receipts under the direct method is cash received from operating activities, which includes cash received from customers, interest received, and dividends received. Cash received from the sale of property, plant, and equipment is reported separately and is considered a cash inflow from investing activities.

Under the Direct Method of Preparing the Statement of Cash