Why are increases in accounts receivable a cash reduction on the cash flow statement?

Why are increases in accounts receivable a cash reduction on the cash flow  statement?

Aditi Arora Trainee Asked on November 12, 2014 in Accounting.
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1 Answer(s)

Since our cash flow statement starts with net income, an increase in accounts receivable is an adjustment to net income to reflect the fact that the company never actually received those funds.

swatisood Trainee Answered on November 12, 2014.
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