A company reported an increase in accounts receivable and an increase in unearned sales revenues during 2019.Which of the following statements is correct?
A)Cash collected from customers equals sales revenues plus both the increase in accounts receivable and the increase in unearned sales revenues.
B)Cash collected from customers equals sales revenues minus both the increase in accounts receivable and the increase in unearned sales revenues.
C)Cash collected from customers equals sales revenues plus the increase in accounts receivable,minus the increase in unearned sales revenues.
D)Cash collected from customers equals sales revenues minus the increase in accounts receivable,plus the increase in unearned sales revenues.

Question

Quizplus · Accepted Answer

Cash collected from customers is calculated by starting with sales revenues, subtracting the increase in accounts receivable (since this represents sales made on credit that have not yet been collected in cash), and adding the increase in unearned sales revenues (since this represents cash received in advance for services or goods to be provided in the future).

A Company Reported an Increase in Accounts Receivable and an Increase