Which items are SUBTRACTED when reconciling from "Cash Collected from Customers" to "Accrual-basis Sales Revenue"?
Select one:
a. Increases in Accounts Receivable and increases in Accounts Payable
b. Increases in Accounts Receivable, but not increases in Accounts Payable
c. Increases in Accounts Payable, but not increases in Accounts Receivable
d. Neither increases in Accounts Receivable nor increases in Accounts Payable
While reconciling from "Cash Collected from Customers" to "Accrual-basis Sales Revenue, Decrease in accounts receivable is subtracted.
Accrual basis sales revenue = Cash collected from customers - Decrease in accounts receivable
If accounts receivable increase, it is added to cash collected to get accrual basis sales revenue. Accounts payable is irrelevant in finding accrual basis sales revenue.
Correct option is d.
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