If Sales are $850,000 and the beginning and ending balances of Accounts Receivable are $43,000 and $48,000,respectively,the cash collected from customers is:
A) $850,000.
B) $802,000.
C) $845,000.
D) $855,000.

Question

Quizplus · Accepted Answer

The cash collected from customers is calculated by adjusting sales for the change in accounts receivable. The increase in accounts receivable ($48,000 - $43,000 = $5,000) means that not all sales were collected in cash. Therefore, cash collected is $850,000 - $5,000 = $845,000.

If Sales Are $850,000 and the Beginning and Ending Balances