Final answer:
The accounts receivable account should be increased when adjusting for any revenues from fulfilling obligations to buyers.
Step-by-step explanation:
The accounts receivable account should be increased when adjusting at the end of the period for any revenues from fulfilling obligations to buyers which has not yet been collected or recorded.
Accounts Receivable is an asset account that represents the amount of money owed to a business by its customers for goods or services provided on credit. When revenue is recognized but payment has not been received, it increases the accounts receivable account. This is because the recognition of revenue in accrual accounting requires that revenue be recorded when earned, regardless of whether cash has been received. Adjusting the accounts receivable shows that the company has a claim to the money, which reflects the credit sales that have taken place.
For example, if a company sells products worth $1,000 to a customer on credit, the revenue is recognized, and accounts receivable is increased by $1,000 because the customer still owes that amount to the company.