An increase in accounts receivable results in a cash inflow on the statement of cash flows.

Name: An increase in accounts receivable results in a cash inflow on the statement of cash flows.
Brand: Quizplus
Rating: 4.9 (44 reviews)

Question

Quizplus · Accepted Answer

An increase in accounts receivable represents an increase in money owed to the company by its customers, which means the company has not yet received the cash payment. Therefore, an increase in accounts receivable represents a decrease in cash flow, and is reflected as a cash outflow on the statement of cash flows.

An Increase in Accounts Receivable Results in a Cash Inflow