An increase in accounts receivable of $6,000 for the year
A)decreases cash flow from operations by $3,000.
B)increases cash flow from operations by $3,000.
C)decreases cash flow from operations by $6,000.
D)increases cash flow from operations by $6,000.

Question

Quizplus · Accepted Answer

An increase in accounts receivable means that the company has made sales on credit but has not yet collected cash for them. Therefore, there is a decrease in cash flow from operations by the same amount, which in this case is $6,000.

An Increase in Accounts Receivable of $6,000 for the Year