If accounts receivable increase during a period,then the amount of cash collected from customers will be greater than the amount of sales reported on the income statement for the period.

Question

Quizplus · Accepted Answer

An increase in accounts receivable means that sales have been made on credit and the cash has not been received yet. Therefore, the amount of cash collected from customers will be less than the amount of sales reported on the income statement for the period.

If Accounts Receivable Increase During a Period,then the Amount of Cash