Cash collected from customers can be computed by the following formula:
A) ending accounts receivable plus beginning accounts receivable minus sales
B) ending accounts receivable minus beginning accounts receivable plus sales
C) beginning accounts receivable minus ending accounts receivable plus sales
D) beginning accounts receivable minus ending accounts receivable minus sales

Question

Quizplus · Accepted Answer

The cash collected from customers can be computed by subtracting the ending amount of accounts receivable from the beginning amount of accounts receivable and then adding sales to the result. This is because the beginning accounts receivable represents the amount owed by customers at the start of the period, and the ending accounts receivable represents the amount owed by customers at the end of the period. By subtracting the ending accounts receivable from the beginning accounts receivable, we can determine the total amount of accounts receivable that were collected during the period. Adding sales to this amount gives us the total cash collected from customers during the period. Therefore, the formula is: beginning accounts receivable - ending accounts receivable + sales.

Cash Collected from Customers Can Be Computed by the Following