Which statements best describes the reason for adjustment

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A company's operating section of the cash-flow statement appears as follows:

Net income79

Adjustment to reconcile net income to operating cash flows due to an increase in deferred revenue (also known as unearned revenue or advance received from customers) during the period 11

Operating cash flow=90

Problem 1: Which one of the following statements best describes the reason for this adjustment? Assume that there are no bad debts, sales returns, and refunds.

a. The company paid more cash to its customers than it received from them.

b. The company paid less cash to its customers than it received from them.

c. The company booked more sales revenue than the cash it received from its customers.

d. The company booked less sales revenue than the cash it received from its customers.

e. None of the above.

Reference no: EM132965241

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