The statement of cash flows of Bosley Corporation shows the amount of Cash receipts from customers as $720,000. If net sales in Bosley Corporation's income statement are reported at $670,000 then:
A) Bosleys accounts receivable increased $50,000.
B) Bosley's Cash account decreased $50,000.
C) Bosleys accounts receivable decreased $50,000.
D) Bosley's accounts receivable are $50,000 at the end of the year.

Question

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The amount of cash receipts from customers is greater than the net sales reported on the income statement, which means that Bosley Corporation collected cash from customers for sales made in the previous period. This indicates a decrease in accounts receivable of $50,000 ($720,000 - $670,000).

The Statement of Cash Flows of Bosley Corporation Shows the Amount