When accounts receivable decrease during a period, cash-basis revenues are higher than revenues reported on an accrual basis.

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When accounts receivable decrease, it means that cash has been received for sales that were made on credit in a previous period. On a cash basis, these cash receipts would be recognized as revenue at the time of receipt, leading to higher cash-basis revenues compared to accrual-basis revenues where sales on credit are recognized as revenue at the time of sale.

When Accounts Receivable Decrease During a Period, Cash-Basis Revenues Are