Sales for the year were $600,000. Accounts receivable were $100,000 and $80,000 at the beginning and end of the year, respectively. Cash received from customers to be reported on the statement of cash flows using the direct method is
A) $700,000
B) $600,000
C) $580,000
D) $620,000

Question

Quizplus · Accepted Answer

To calculate cash received from customers using the direct method, start with sales and adjust for the change in accounts receivable: $600,000 - ($100,000 - $80,000) = $620,000.

Sales for the Year Were $600,000