Which of the following reasons is NOT considered acceptable when examining the decrease in accounts receivable on the cash flow statement?
A) More customers have failed to pay off their accounts compared to prior year.
B) The company hired an employee dedicated to monitoring accounts receivable.
C) The company is collecting its accounting receivable faster.
D) Sales revenue decreased.

Question

Quizplus · Accepted Answer

A decrease in accounts receivable due to more customers failing to pay would not be considered acceptable, as it indicates potential collection issues rather than improved cash flow management.

Which of the Following Reasons Is NOT Considered Acceptable When