If accounts receivable have increased during the period
A) revenues on an accrual basis are less than revenues on a cash basis.
B) revenues on an accrual basis are greater than revenues on a cash basis.
C) revenues on an accrual basis are the same as revenues on a cash basis.
D) expenses on an accrual basis are greater than expenses on a cash basis.

Question

Quizplus · Accepted Answer

Increase in accounts receivable indicates that some sales have been made on credit during the period, which are included in revenues on an accrual basis but not included in revenues on a cash basis. Therefore, revenues on an accrual basis are greater than revenues on a cash basis.

If Accounts Receivable Have Increased During the Period