Which describes possible effects of action on balance sheet

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Problem 1: At the end of Quarter 1, a company announces that its cash flows would improve in Quarter 2. To give an appearance of improved cash flows in Quarter 2, the company shifts receiving cash from its customers from Quarter 1 to Quarter 2 by delaying receipts from customers in Quarter 1. Pick one of the choices below that describes the possible effects of this action on the balance sheet at the end of Quarter 1. The company only manipulates cash flows; it does not manipulate reported income.

a. Increase receivables or increase deferred revenues
b. Increase receivables or decrease deferred revenues
c. Decrease receivables or increase deferred revenues
d. Decrease receivables or decrease deferred revenues

Reference no: EM132979618

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