An increase in accounts receivable increases profitability because the receivables are a source of funds.

Question

An increase in accounts receivable increases profitability because the receivables are a source of funds.​

Quizplus · Accepted Answer

An increase in accounts receivable means that a company has extended credit to its customers, which may result in cash flow problems if those customers do not pay their bills in a timely manner. This can lead to increased expenses for collection efforts, and ultimately a decrease in profitability.

An Increase in Accounts Receivable Increases Profitability Because the Receivables