Quincy Industries began the year with $46,700 in accounts receivable and ended the year with $31,900 in accounts receivable.If sales for the year were $687,000,the cash collected from customers during the year amounted to:
A) $701,800
B) $733,700
C) $672,200
D) $655,100

Question

Quizplus · Accepted Answer

To calculate the cash collected from customers, you start with the sales for the year and adjust for the change in accounts receivable. The change in accounts receivable is the beginning balance minus the ending balance, which is $46,700 - $31,900 = $14,800. This amount represents the net cash collected over and above sales. Therefore, cash collected is sales plus the decrease in accounts receivable: $687,000 + $14,800 = $701,800.

Quincy Industries Began the Year with $46,700 in Accounts Receivable