An increase in accounts receivable represents an increase in net cash provided by operating activities because receivables will produce cash when they are collected.

Question

Quizplus · Accepted Answer

An increase in accounts receivable represents a decrease in net cash provided by operating activities because it means the company has not yet collected cash for the goods or services provided. When the receivables are eventually collected, they will increase cash in a later period.

An Increase in Accounts Receivable Represents an Increase in Net