The balance of the accounts receivable balance of XYZ Pty Ltd was $23 000 at the beginning of the financial year ended 30 June and $27 000 at the end of the period. The total credit sales for the company for the financial year was $132 000. Bad debts write-off totalled $5500. What was the total of the cash received from accounts receivable during the year?
A) $118 500
B) $122 500
C) $128 000
D) $133 500

Question

Quizplus · Accepted Answer

To calculate the total cash received from accounts receivable during the year, we start with the opening balance of accounts receivable, add total credit sales, subtract bad debts written off, and then subtract the closing balance of accounts receivable. The formula looks like this: Opening balance + Credit sales - Bad debts - Closing balance = Cash received.So, using the numbers provided: $23,000 (opening balance) + $132,000 (credit sales) - $5,500 (bad debts) - $27,000 (closing balance) = $122,500.

The Balance of the Accounts Receivable Balance of XYZ Pty