Under the direct method,which of the following would not be included in the operating section of the cash flow statement?
A) Cash payments for income taxes
B) Cash payments to purchase insurance
C) Cash payments to purchase long-term equipment
D) Cash receipts from customers

Question

Quizplus · Accepted Answer

The operating section of the cash flow statement under the direct method includes cash receipts from customers and cash payments for operating expenses such as salaries, rent, and utilities. Cash payments for income taxes would also be included as an operating expense. However, cash payments for the purchase of long-term equipment would not be included in the operating section, as they are considered investing activities. Cash payments to purchase insurance would also not be included in the operating section, as they are classified as a financing activity if they are related to the company's operations.

Under the Direct Method,which of the Following Would Not Be