A Company Uses the Direct Method to Prepare the Statement

A company uses the direct method to prepare the statement of cash flows. How will the amount of cash received from customers be computed?

A) The amount of cash received from customers is computed as cost of goods sold plus ending inventory minus beginning inventory.
B) The amount of cash received from customers is computed as cost of goods sold minus ending inventory plus beginning inventory.
C) The amount of cash received from customers is computed as sales revenue plus the decrease (or minus the increase) in accounts receivable.
D) The amount of cash received from customers is computed as sales revenue minus the decrease (or plus the increase) in accounts receivable.

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