If Accounts Receivable increases on a comparative balance sheet,this means:
A)collections were more than sales.
B)credit sales are decreasing.
C)credit sales are increasing more than collections.
D)None of these answers is correct.

Question

Quizplus · Accepted Answer

An increase in Accounts Receivable indicates that credit sales are increasing more than collections, as more customers are purchasing on credit and have not yet paid their bills. Option A is incorrect because the collections were less than credit sales, causing an increase in Accounts Receivable. Option B is incorrect because a decrease in credit sales would result in a decrease in Accounts Receivable. Option D is incorrect because one of the options is correct.

If Accounts Receivable Increases on a Comparative Balance Sheet,this Means