When preparing the statement of cash flows,the reason that net sales revenue is adjusted for the change in accounts receivables is to convert net sales to cash collected from customers,since accounts receivable represents sales revenue not collected from customers at the beginning and end of the accounting year.

Question

Quizplus · Accepted Answer

This statement is true. Adjusting net sales revenue for the change in accounts receivable is necessary in order to convert the figure from an accrual basis to a cash basis, reflecting the actual cash collected from customers during the period. Accounts receivable represents sales revenue that is owed but not yet collected at the beginning and end of the accounting year.

When Preparing the Statement of Cash Flows,the Reason That Net