If Accounts Payable Have Increased During a Period

question 213

Multiple Choice

If accounts payable have increased during a period

• A) revenues on an accrual basis are less than revenues on a cash basis.
• B) expenses on an accrual basis are less than expenses on a cash basis.
• C) expenses on an accrual basis are greater than expenses on a cash basis.
• D) expenses on an accrual basis are the same as expenses on a cash basis.

---

Definitions:

Allowance For Doubtful Accounts

A contra-asset account that represents the estimated amount of receivables which are not expected to be collected.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects revenue from its credit sales by dividing net credit sales by the average accounts receivable.

Net Credit Sales

Sales made on credit minus any returns or allowances.

Accounts Receivable

The money owed to a business by its customers for goods or services delivered but not yet paid for.