Assume that New Life uses the direct method of computing cash flows from operating activities.Based on the preceding information,what amount will be reported by the company as cash received from customers during the year?
A)$815,000
B)$785,000
C)$800,000
D)$835,000

Question

Quizplus · Accepted Answer

The direct method calculates cash received from customers by adjusting sales revenue for changes in accounts receivable. If sales revenue is $800,000 and accounts receivable decreased by $15,000, then cash received from customers is $815,000.

Assume That New Life Uses the Direct Method of Computing