During 2016, the accounts receivable balance of Dickerson Corp.increased.Which of the following statements is true?
A) This indicates that Dickerson sold more than it collected in cash during the period.
B) This increase is added to net income in the operating activities section of a statement of cash flows prepared under the indirect method.
C) This increase is added to sales recognized on the income statement to determine the cash collections from customers during the period.
D) This increase is considered only when the operating activities section of a statement of cash flows is prepared under the indirect method.

Question

Quizplus · Accepted Answer

An increase in accounts receivable indicates that the company sold more on credit than it collected in cash, meaning it recognized more revenue from sales than it received in cash during the period.

During 2016, the Accounts Receivable Balance of Dickerson Corp