Cash collections of Accounts Receivable will increase ________ and decrease ________.
A)Accounts Receivable; Accounts Payable
B)Accounts Payable; Accounts Receivable
C)Cash; Accounts Payable
D)Cash; Accounts Receivable

Question

Quizplus · Accepted Answer

When cash collections of Accounts Receivable increase, it means that customers have paid their outstanding balances. This will result in a decrease in the Accounts Receivable balance because the company has received the cash owed to them. At the same time, the increase in cash balance will reflect that the cash has been received. Therefore, the correct option is D.

Cash Collections of Accounts Receivable Will Increase ________ and Decrease