Asked by elizabeth stelley on Jul 18, 2024
Verified
A reduction in the average accounts receivable balance is a source of cash.
Accounts Receivable Balance
The total amount of money owed to a company by its customers for goods or services delivered on credit.
Source Of Cash
Refers to activities or transactions that increase the cash balance, including operating activities, financing, and investing.
- Recognize the origins of cash within the realm of short-term financial management.
Verified Answer
MC
Michael Carrier llJul 21, 2024
Final Answer :
True
Explanation :
A reduction in the average accounts receivable balance means that a company is collecting its outstanding receivables more quickly or reducing the amount of credit extended to customers, which increases the company's cash flow.
Learning Objectives
- Recognize the origins of cash within the realm of short-term financial management.
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