If ending accounts receivable exceeds the beginning accounts receivable
A) cash collections during the period exceed the amount of revenue recognized.
B) net income for the period is less than the amount of cash-basis income.
C) no cash was collected during the period.
D) cash collections during the year are less than the amount of revenue recognized.

Question

Quizplus · Accepted Answer

If ending accounts receivable is higher than beginning accounts receivable, it implies that the company has recognized more revenue on credit terms than it has collected in cash. This means that cash collections are less than the revenue recognized during the period.

If Ending Accounts Receivable Exceeds the Beginning Accounts Receivable