Which of the following reasons is NOT consideredacceptable when examining the decrease in accounts receivable on...

Which of the following reasons is NOT considered acceptable when examining the decrease in accounts receivable on the cash flow statement?

		More customers have failed to pay off their accounts compared to prior year.
		The company is collecting its accounting receivable faster.
		The company hired an employee dedicated to monitoring accounts receivable.
		Sales revenue decreased.

Solutions

Expert Solution

Answer is option a)More customers have failed to pay off their accounts compared to prior year.

Explanation

When customer have failed to pay off their Account, the company's account receivable will be increased.

When the company is collecting its accounting receivable faster, Account receivable will be decreased

When company appoint to monitor Account receivable, then he helps to increase collection from Account receivable thus Account receivable will be decreased

Decrease in sales revenue also decreases the credit sales. Thus it will cause to decrease in account receivable.

ekkarill92 answered 2 years ago

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