Which of the following would appear on a statement of cash flows prepared using the direct method?
A) Amortization expense would appear on the statement.
B) Loss on sale of equipment would appear on the statement.
C) Net income would appear on the statement.
D) Collections from customers would appear on the statement.

Question

Quizplus · Accepted Answer

The direct method of preparing a statement of cash flows shows actual cash inflows and outflows, where collections from customers represent a primary cash inflow for a business. The other options (A, B, C) are adjustments made in the indirect method or are non-cash items that do not appear in the cash flows from operating activities section of the direct method.

Which of the Following Would Appear on a Statement of Cash