On January 1,2011,Company Z had accounts receivable of $4,000.During the year,Company Z sold $100,000 of merchandise to credit customers.At December 31,2011,Company Z had accounts receivable of $5,000.How much cash did the company collect from credit customers during the year?
A)$105,000
B)$101,000
C)$99,000
D)$95,000

Question

Quizplus · Accepted Answer

We can find the cash collected from credit customers by calculating the change in accounts receivable from the beginning to end of the year. 
Beginning accounts receivable: $4,000 
Ending accounts receivable: $5,000 
Change in accounts receivable: $5,000 - $4,000 = $1,000 
Therefore, the company collected $100,000 - $1,000 = $99,000 in cash from credit customers during the year. Therefore, the best choice is C.

On January 1,2011,Company Z Had Accounts Receivable of $4,000