If accounts receivable increase during a period, then the amount of cash collected from customers will be less than the amount of sales reported on the income statement for the period.

Question

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This is because accounts receivable represents the amount of sales that have been made but not yet collected. If the amount of accounts receivable increases, it means that some sales have not been collected yet, so the amount of cash collected from customers will be less than the amount of sales reported on the income statement for the period.

If Accounts Receivable Increase During a Period, Then the Amount