Asked by
Verified
Cash collected from customers is a cash flow from operating activities and is calculated when using the indirect method for preparing the statement of cash flows.
Indirect Method
In financial accounting, this method is used to prepare the cash flow statement, adjusting net income for changes in non-cash accounts to calculate cash flow from operating activities.
Operating Activities
Activities related directly to the production, sale, and delivery of a company's products and services, as reflected in its cash flow.
Cash Collected
The total amount of money received by a company from its various sources during a particular period, including sales, investments, and financing activities.
- Master the adjustments essential for crafting a cash flow statement with the indirect technique.
- Differentiate between the direct and indirect methods of reporting cash flows from operating activities.
Verified Answer
Learning Objectives
- Master the adjustments essential for crafting a cash flow statement with the indirect technique.
- Differentiate between the direct and indirect methods of reporting cash flows from operating activities.
Related questions
Most Companies Use the Direct Method for Disclosing Their Cash ...
If Land Costing $145,000 Was Sold for $205,000, the $60,000 ...
Which of the Following Would Be Subtracted from Net Income ...
When Accrued Liabilities Increase from the Beginning to the End ...
Under the Indirect Method,an Increase in Prepaid Expenses Is Subtracted ...