During 2015, Alfred Inc. had sales on account of $198,000, cash sales of $81,000, and collections on account of $126,000. In addition, they collected $2,175 which had been written off as uncollectible in 2014. As a result of these transactions, the change in the accounts receivable balance indicates a

Question

Quizplus · Accepted Answer

The total amount of sales on account and cash sales is $198,000 + $81,000 = $279,000. The total amount collected (including the amount previously written off as uncollectible) is $126,000 + $2,175 = $128,175. Therefore, the total increase in accounts receivable is $279,000 - $128,175 = $150,825. However, since $2,175 of this increase is due to the collection of the previously written off amount, the net increase in accounts receivable is $150,825 - $2,175 = $148,650. This represents the change in accounts receivable balance.