Accounts receivable had a debit balance of $4,000 at the beginning of the period, and a debit balance of $6,000 at the end of the period. Based on this information, the adjustment to net income for the period will be reported as:
a) an increase of $2,000 which will be subtracted from net income
b) a decrease of $2,000 which will be subtracted from net income
c) an increase of $2,000 which will be added to net income
d) a decrease of $2,000 which will be added to net income

Accounts receivable is generally represented by debit balance and any increase in debit balance of accounts receivable will increase the net income of any company/firm/corporation.

In the given scenario, the debit balance of accounts receivable has been increase by $2,000 i.e from $4,000 to $6,000, therefore,the net income will also be increased by $2,000.

Based on the above discussion, the answer shall be c) an increase of $2,000 which will be added to net income

AlexcisW AlexcisW · Answer 2 · 2021-05-15T19:54:05+02:00

AlexcisW AlexcisW

15-05-2021

Answer:

a) an INCREASE of $2,000 which will be SUBTRACTED from net income

Explanation:

The increase in accounts receivable of $2000 will be subtracted from the income to determine the net cash provided by operating activities.

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