Fitch Company reported an increase of $370,000 in its accounts receivable during the year 2013.The company's statement of cash flows for 2013 reported $1 million of cash received from customers.What amount of net sales must Fitch have recorded in 2013?

Question

Quizplus · Accepted Answer

The increase in accounts receivable of $370,000 represents the portion of cash received from customers that was not recorded as revenue in 2013. Therefore, net sales must have been the amount of cash received ($1 million) minus the increase in accounts receivable ($370,000), which equals $630,000. Thus, the correct answer is C, $1,370,000.

Fitch Company Reported an Increase of $370,000 in Its Accounts