If $80,000 is owed by customers at the beginning of the year, $75,000 is owed at the end and credit sales are $120,000, the cash received from customers is:
A) $115,000
B) $125,000
C) $80,000
D) $120,000

Question

Quizplus · Accepted Answer

The formula to calculate cash received from customers is: Credit sales + beginning accounts receivable - ending accounts receivable.

Substituting the given values, we get:
Cash received from customers = $120,000 + $80,000 - $75,000
Cash received from customers = $125,000

Therefore, the correct answer is choice B, $125,000.

If $80,000 Is Owed by Customers at the Beginning of the Year