Cash that results from collections on account are reported as investing activities on the statement of cash flows.

Question

Quizplus · Accepted Answer

Cash collections from accounts receivable are considered operating activities because they are directly related to the company's primary operations of selling goods or services on credit. Investing activities, on the other hand, include the acquisition and disposal of long-term assets and investments, such as property, plant, and equipment, and marketable securities.

Cash That Results from Collections on Account Are Reported as Investing