During 2017,the Accounts Receivable Balance of Dickerson Corp

question 57

Multiple Choice

During 2017,the accounts receivable balance of Dickerson Corp.increased.Which of the following statements is true?

• A)This indicates that Dickerson sold more than it collected in cash during the period.
• B)This increase is added to net income in the Operating Activities section of a statement of cash flows prepared under the indirect method.
• C)This increase is added to sales recognized on the income statement to determine the cash collections from customers during the period.
• D)This increase is considered only when the Operating Activities section of a statement of cash flows is prepared under the indirect method.

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Definitions:

Capital Lease Obligations

Long-term lease agreements that are recorded as assets on a company's balance sheet, effectively treating the lease as a purchase of the asset.

Current Portion

The portion of long-term liabilities that is due to be paid within the next twelve months.

Operating Lease

A leasing agreement that allows for the use of an asset but does not convey rights of ownership, often treated as an operational expense rather than a capital expense.

Lease Liability

An obligation representing the present value of future lease payments under a leasing agreement.