why is cash receipts different to sales figure

Question

anonymous · Answer

Cash receipts refers to the amount of cash received through continued operations. Because of accounts receivables this number varies. You can sell something to a company and they may decide to pay you back at a later date because of liquidity reason lets say. Then you sold the product but didn't receive the cash for it. That is why these numbers are different!!

anonymous · Answer

It is known as accrual method. for example a magazine distributor, it receives two year subscription plan cash before distributing magazines to the users. so he will only show sales as per the one year distribution of magazine and cash which he received for two year subscription will be at liabilities known as unearned revenue. you can refer this link, find magazine subscription example http://www.principlesofaccounting.com/chapter3/chapter3.html