If accounts receivable have increased during a 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

When accounts receivable increase, it means that more sales have been made on credit, which are recognized as revenue under the accrual basis but not yet collected in cash, making accrual revenues greater than cash revenues.

If Accounts Receivable Have Increased During a Period