Cash flow from operating Activities Cash flow statement Direct Method

1- Cash collection from customers A/R ***** Cash ***** A/R**** Revenue**** Cash collection from customers= Revenue(sales) (Cr) Decrease in A/R (Cr) + Increase in AR (Cr) -

2- Cash Payment to suppliers Inventory ***** A/P ***** C G Sold ***** Cash ***** Inventory ***** A/P ***** Cash for Suppliers = Cost of Good sold (Dr) Increase In Inventory (Dr) Decrease in A/P (Dr) + Decrease in Inventory (Cr) Increase in A/p (Cr) -

3- Cash Payment for Operating Expenses P.P exp ***** Accu exp ***** Op. exp ***** Cash ***** P.P exp ***** Cash Payment for operating expenses = Operating Expenses (Dr) Increase in Prepaid Exp.(Dr) Decrease in Accrued Exp.(Dr) + Decrease in Prepaid Exp.(Dr) Increase in Accrued Exp.(Dr) -