The amount of cash a department store received from customers during a period equals the sales for the period, reduced by the _____ during this period or increased by the _____ during the period.
A)decrease in accounts payable; increase in accounts payable
B)increase in accounts payable; decrease in accounts payable
C)decrease in accounts receivable; increase in accounts receivable
D)increase in accounts receivable; decrease in accounts receivable
E)none of the above

Question

Quizplus · Accepted Answer

The amount of cash received from customers is the sales for the period. This sales amount can be reduced if customers pay with credit, reducing the accounts receivable, or increased if customers pay with cash before the end of the period, increasing the accounts receivable. Therefore, an increase in accounts receivable would increase the cash received from customers, while a decrease in accounts receivable would reduce it. Option D is the only one with this logic.

The Amount of Cash a Department Store Received from Customers