Company C
The following chart represents Company C's operating activities section of a statement of cash flows for Year 1:
$$\begin{array}{l}
\underline{\text { Operatine artivities: }}\
\text { Cash collected from customers } & \$ 550,000 \
\text { Cash payments for merchandise } & ( 150,000 ) \
\text { Cash payments for operating expenses } & \underline{( 275,000 ) }\
\text { Net cash inflow from operating activities } & \underline{ \$ 125,000}
\end{array}$$
-Refer to the figure Company C.Which method of preparing the operating activities section was used?

Question

Company C
The following chart represents Company C's operating activities section of a statement of cash flows for Year 1:
 $$\begin{array}{l}
 \underline{\text { Operatine artivities: }}\
 \text { Cash collected from customers } & \$ 550,000 \
\text { Cash payments for merchandise } & ( 150,000 ) \
\text { Cash payments for operating expenses } &  \underline{( 275,000 ) }\
\text { Net cash inflow from operating activities } & \underline{ \$ 125,000}
\end{array}$$
-Refer to the figure Company C.Which method of preparing the operating activities section was used?

Quizplus · Accepted Answer

The direct method is used here as it lists specific cash inflows and outflows from operating activities.

Company C the Following Chart Represents Company C's Operating Activities

Company C
the Following Chart Represents Company C's Operating Activities