During 2021, 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 2020.As a result of these transactions, the change in the accounts receivable balance indicates a

Question

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The total sales for the year were $279,000 ($198,000 on account + $81,000 in cash sales). Of this amount, $126,000 was collected on account, and $2,175 was collected on a previously written-off account. The total cash collected was therefore $209,175.

To determine the change in accounts receivable, we need to subtract the cash collected from the total sales, giving us $69,825 ($279,000 - $209,175). This means that accounts receivable has decreased by $69,825, which is the opposite of an increase. Therefore, choices A, C, and D can be eliminated.

The only remaining choice is B, which is incorrect as accounts receivable decreased, not increased. Therefore, there is no correct answer to this question.