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

Question

Quizplus · Accepted Answer

Cash receipts from operating activities only include transactions related to the normal operations of the business. Collection of long-term note receivable is a financing activity and therefore excluded from the operating activities section of the statement of cash flows. The other options are all examples of cash receipts from operating activities.

Under the Direct Method of Preparing the Statement of Cash