Rader Company had credit sales of $550,000. The beginning accounts receivable balance was $40,000 and the ending accounts receivable balance was $140,000. What were the cash collections from customers during the period?
A) $650,000
B) $550,000
C) $450,000
D) $590,000

Question

Quizplus · Accepted Answer

The cash collections from customers can be calculated by adding the beginning accounts receivable balance to the credit sales and then subtracting the ending accounts receivable balance. Therefore, cash collections = beginning accounts receivable balance + credit sales - ending accounts receivable balance = $40,000 + $550,000 - $140,000 = $450,000.

Rader Company Had Credit Sales of $550,000