The necessary adjustment to the sales amount shown on the income statement to arrive at cash collections from customers is:

Question

Quizplus · Accepted Answer

The change in accounts receivable represents the difference between the beginning and ending balance of accounts receivable during the period. This change includes the amount of sales that were made during the period but have not yet been collected. Therefore, by subtracting the change in accounts receivable from the sales amount shown on the income statement, we can arrive at the cash collections from customers. Option B and C are not relevant to adjusting the sales amount for cash collections.

The Necessary Adjustment to the Sales Amount Shown on the Income