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Basic Question 4 of 8
Which item begins the direct method of presenting the cash flow from operating activities?
B. Gross profit
C. Net income
A. Sales
B. Gross profit
C. Net income
User Contributed Comments 2
| User | Comment |
|---|---|
| Inaganti6 | It's so simple yet requires thought - the amount your A/C Receivable did not go up by with respect to sales is what you got in cash and what it went up by is what you paid for in credit. It's pure common sense but I overthink these things some times ! |
| Inaganti6 | *** what you were paid with in credit (you gave) |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe the steps in the preparation of direct and indirect cash flow statements, including how cash flows can be computed using income statement and balance sheet data
CFA® 2025 Level I Curriculum, Volume 2, Module 4.