Statement of cash flows : It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company. Cash flows from operating activities: In this direct method, cash flow from operating activities is computed by using all cash receipts and cash payments during the year. Cash Receipts: It encompasses all the cash receipts from sale of goods and on account receivable. The following formula is used to calculate cash receipt from customers: Cash receipts from Customers ] = Sales revenue ( + Decrease in Accounts Receivable OR − Increase in Accounts Receivable ) The amount of cash collected from customers.

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Chapter 14, Problem 9QC

To determine

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

Cash flows from operating activities: In this direct method, cash flow from operating activities is computed by using all cash receipts and cash payments during the year.

Cash Receipts: It encompasses all the cash receipts from sale of goods and on account receivable.

The following formula is used to calculate cash receipt from customers:

Cash receipts from Customers]=Sales revenue (+ Decrease in Accounts Receivable OR − Increase in Accounts Receivable)

The amount of cash collected from customers.

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