If Accounts Receivable Have Increased During a Period

question 52

Multiple Choice

If accounts receivable have increased during a period,

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

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Definitions:

Liabilities

Financial obligations or debts owed by a business to external parties or stakeholders.

Current Liabilities

Short-term financial obligations due within one year or within the company's operating cycle, whichever is longer.

Long-Term Liabilities

Financial obligations of a company that are due beyond one year, such as bonds payable, long-term loans, and lease liabilities.

Known Current Liabilities

Short-term financial obligations that are recognized and recorded, expected to be settled within one year or within the normal operating cycle.