CFA Practice Question
When preparing a direct method statement of cash flows, the principal component of cash flow from operating activities is
A. net income plus depreciation expense.
B. cash collections.
C. the decrease in accounts receivable.
Explanation: Cash collections is the beginning point and principal component of cash flow from operating activities.
User Contributed Comments 2
| User | Comment |
|---|---|
| indrayudha | If this is indirect method, A would be the answer. |
| moneyguy | I see. Thanks, indrayudha. |