When the direct method is used to determine operating cash flows,how is the collection of cash from customers shown on the statement of cash flows?

Question

Quizplus · Accepted Answer

The direct method of determining operating cash flows requires the presentation of cash receipts and payments from operating activities. Collection of cash from customers is a receipt of cash from operating activities, and as such, is shown as an operating activity on the statement of cash flows.

When the Direct Method Is Used to Determine Operating Cash