Help please.
How can an increase in the account receivable be considered a use of cash?
Could someone explain or provide an example.
Thanks in advance.
Edited 1 time(s). Last edit at Tuesday, November 23, 2010 at 04:38PM by hhCFA.作者: ramdabom 时间: 2011-7-11 19:45
Account receivable implies the company already paid cash for the inventory it sold, but hasn't received cash for it from the customer. Its a use of company's cash - effectively it has given a loan to the customer.作者: Bulla564 时间: 2011-7-11 19:45
Thanks ravinsu.
So an increase in the account receivable indicates a sale on credit
