Question

Sales for the year were $500,000. Accounts receivable were $100,000 and $80,000 at the beginning and end of the year, respectively. Cash received from customers to be reported on the cash flow statement using the direct method is a.$520,000. b.$480,000. c.$500,000. d.$600,000.

Answer 1

Answer:

a.$520,000

Explanation:

                                                                                  Amount($)

Sales for the year                                                       500,000

Opening accounts receivable                                   100,000

Closing accounts receivable                                    (80,000)

Cash received from customers                                520,000

Cash received from customers to be reported on the cash flow statement using the direct method is $520,000.

Cash flow statements are usually stated using the direct method or indirect method.