RJB reported sales of $200,000 and an increase in accounts receivable of $30,000 during 2001. Under the direct method, what would be RJB's cash collected from customers during 2001?
A) $170,000
B) $200,000
C) $230,000
D) Cannot be determined from information given.

Question

Quizplus · Accepted Answer

Under the direct method, cash collected from customers is found by subtracting the increase in accounts receivable from sales. 
Cash collected from customers = Sales - Increase in accounts receivable
Cash collected from customers = $200,000 - $30,000
Cash collected from customers = $170,000

RJB Reported Sales of $200,000 and an Increase in Accounts