Which of the following items involving current trade accounts receivable is most likely to appear in a statement of cash flows?
A)The balance in the allowance for doubtful accounts
B)The change in net sales
C)Sales returns and allowances
D)Collection of an account previously written off
E)None of these answers is correct.

Question

Quizplus · Accepted Answer

The collection of an account previously written off will result in an inflow of cash, which is a cash flow activity and therefore would be included in a statement of cash flows. Choices A, B, and C relate to income statement accounts and would not appear in a statement of cash flows.

Which of the Following Items Involving Current Trade Accounts Receivable