AFP
CTP · Question #57
(Topic 1) A company sells products to customers on credit, generating accounts receivable. The company uses the accrual accounting method. Once the company collects good funds from its customers, what
The correct answer is C. Cash balance is increased, and income is not affected.. See the full explanation below for the reasoning.
Question
- (Topic 1)
A company sells products to customers on credit, generating accounts receivable. The company uses the accrual accounting method. Once the company collects good funds from its customers, what is the impact on the financial statements of the company?
Options
- ACash balance is not affected, and income is increased.
- BCash balance is increased, and income is decreased.
- CCash balance is increased, and income is not affected.
- DCash balance is increased, and income is increased.
How the community answered
(17 responses)- A6% (1)
- B18% (3)
- C71% (12)
- D6% (1)
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