Accounts receivable will help explain a difference between net income on an income statement and cash from operating activities on the statement of cash flows.
What is an income statement?
An income statement refers to a financial document which is typically used to record the amount of money (income or revenues) that are entering into a business.
Generally, accounts receivable is a balance sheet line item which can be used by an entrepreneur or business firm to explain a difference between net income on an income statement and cash that were collected from customers (operating activities) on the statement of cash flows.
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