The statement of cash flows of Bosley Corporation shows the amount of cash received from customers as $720,000.If net sales in Bosley Corporation's income statement are reported at $670,000 then:
A)Bosley's accounts receivable increased $50,000.
B)Bosley's cash account decreased $50,000.
C)Bosley's accounts receivable decreased $50,000.
D)Bosley's accounts receivable are $50,000 at the end of the year.

Question

Quizplus · Accepted Answer

The amount of cash received from customers ($720,000) is greater than net sales ($670,000), indicating that in addition to the sales made during the period, Bosley Corporation also collected $50,000 from previous sales on credit. This means Bosley's accounts receivable decreased by $50,000.

The Statement of Cash Flows of Bosley Corporation Shows the Amount