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Why accounts receivable is added to convert cash to accrual basis net income?

Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Why accounts receivable is added to convert cash to accrual basis net income?

  • This topic has 0 replies, 1 voice, and was last updated 10 years ago by straightmarble02.
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  • September 11, 2015 at 2:47 am #271172
    straightmarble02
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    Revenues plus gains less expenses and losses for a period equals net income or net loss. Doesn’t it? So why accounts receivable is added to convert cash basis to accrual basis net income?

    I know accounts receivable is treated only in accrual basis, but adding accounts receivable is against ‘net income=revenues + gains – expenses – losses’ formula.

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