A company sells products to customers on credit, generating accounts receivable.

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A company sells products to customers on credit, generating accounts receivable. The company uses the accrual accounting method. Once the company collects good funds from its customers, what is the impact on the financial statements of the company?

Cash balance is not affected, and income is increased.

Cash balance is increased, and income is decreased.

Cash balance is increased, and income is not affected.

Cash balance is increased, and income is increased.

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Update on: Oct 21, 2025
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A company sells products to customers on credit, generating accounts receivable.

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