When the amount of interest receivable decreases during an accounting period:
A)Accrual-basis revenues exceed cash collections from borrowers.
B)Accrual-basis net income exceeds cash-basis net income.
C)Accrual-basis revenues are less than cash collections from borrowers.

Question

Quizplus · Accepted Answer

If the amount of interest receivable decreases during an accounting period, it implies that the company has collected more cash from borrowers than the revenue recognized on an accrual basis. This means that the accrual-basis revenues are less than cash collections from borrowers.

When the Amount of Interest Receivable Decreases During an Accounting