Question
One company's Balance Sheet shows huge increase in its Accounts Receivable (A/R) compared with that of the previous year. Which of the following is the
One company's Balance Sheet shows huge increase in its Accounts Receivable (A/R) compared with that of the previous year. Which of the following is the most reasonable analysis? Group of answer choices 1. The increase of the A/R indicates the huge growth of its sales in the current year. 2. The increase of the A/R indicates that the company has not collected cash for its sales from its customers. By doing so, the company's cash flows of this year must have decreased a lot.. 3. The increase of the A/R indicates that the company owes a lot to its creditors this year. When the payment is made, the company will decrease its cash flows by a large amount. 4. The increase of A/R indicates that the company failed to collect cash from its sales. Due to the failure, it must have reported huge losses.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started