Choice "B" is correct. A $10,000 increase in accounts receivable means that $10,000 of the sales revenue recorded using the accrual basis during the year has not yet been paid by the customers. Under cash basis accounting, revenue is not recorded until the cash has been received, so this amount must be deducted to arrive at cash basis income. The $6,000 decrease in accounts payable means that total cash payments to vendors during the year exceeded the current period's accrual basis expenses. Under the cash basis, expenses are recorded when payment is made, so the $6,000 must be deducted to arrive at cash basis income. If cash-basis pretax income is $100,000, then accrual-basis pretax income must be $116,000 ($100,000 cash basis income$116,000 accrual basis income - $10,000 increase in AR - $6,000 decrease in AP).Choice "a" is incorrect. The increase in accounts receivable must be subtracted from, not added to, accrual basis income to calculated cash basis income, as explained above.
Choice "d" is incorrect. The decrease in accounts payable must be subtracted from, not added to, accrual basis income to calculated cash basis income, as explained above.
Choice "c" is incorrect. Both the increase in accounts receivable and the decrease in accounts payable must be subtracted from, not added to, accrual basis income to calculated cash basis income, as explained above.