(Appendix) a Decrease in Accounts Receivable Is Deducted from Net

question 2

True/False

(Appendix) A decrease in Accounts Receivable is deducted from net sales to compute cash collected from customers.

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Definitions:

Accounts Receivable

Amounts due from clients to a business for goods or services that have been supplied or rendered but haven't been settled.

Accounts Payable

Amounts owed by a company to suppliers or creditors for goods and services received but not yet paid for.

Supplies

Materials and items consumed or used in the day-to-day operations of a business but not directly tied to the products manufactured.

Utilities Expense

The cost incurred by a business for basic services such as electricity, water, gas, and sewage during an accounting period.