When the amount of interest receivable decreases during an accounting period:

Question

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If the amount of interest receivable decreases during an accounting period, it means that accrual-basis revenues are less than cash collections from borrowers. This could happen if there is a decrease in the outstanding loan balances, or if customers are paying off their loans faster than expected. It does not necessarily mean that accrual-basis net income exceeds cash-basis net income or that accrual-basis expenses are less than cash payments to borrowers.

When the Amount of Interest Receivable Decreases During an Accounting