Cash collections from customers equals sales on account plus the:
A) increase in accounts receivable
B) decrease in accounts payable
C) decrease in accounts receivable
D) increase in accounts payable

Question

Quizplus · Accepted Answer

Cash collections from customers are the amount that a company receives from its customers for the goods or services provided. This amount is equal to the sum of the sales made on account and the decrease in accounts receivable. When accounts receivable decrease, it means that customers are paying off their debts to the company, which results in an increase in the company's cash collections. Therefore, the correct answer is C, decrease in accounts receivable.

Cash Collections from Customers Equals Sales on Account Plus The