If credit sales for the year are $120,000 and the trade receivables balance has increased by $10,500 over the year, how much cash was received from trade receivables during the year?

Question

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The increase in trade receivables means that not all credit sales were collected in cash. Therefore, the amount of cash received from trade receivables during the year is the credit sales ($120,000) minus the increase in trade receivables ($10,500), which is $109,500 (option D).

If Credit Sales for the Year Are $120,000 and the Trade