Question

Cash flows from collections on credit sales are usually reported in the statement of cash flows as part of:


Operating activities.

Financing activities.

Investing activities.

Noncash activities.

This is not reported in the statement of cash flows.

Answer 1

Answer:

Operating activities.

Explanation:

Operating activities are events and transactions that generate income for a  business. They are the normal business activities of producing or purchasing merchandise, selling goods, and services to customers. They also include business administration and selling expenses.

Examples of incomes from operating activities are

1.  Cash sales

2. Interest received

3. Lawsuit settlements receipts

4. Cash dividends received

5. Collection from accounts receivables