An increase in the accounts receivable balance provides an increase in cash flow.

Question

Quizplus · Accepted Answer

An increase in the accounts receivable balance represents an increase in the amount of money owed to the company by its customers. This does not necessarily result in an increase in cash flow as cash has not been received yet. In fact, an increase in accounts receivable can potentially decrease cash flow if the company is not able to collect the outstanding balances in a timely manner.

An Increase in the Accounts Receivable Balance Provides an Increase