If credit sales for the year are $120,000 and the accounts receivable balance has increased by $10,500 over the year, how much cash was received from accounts receivable during the year?
A)$130,500.
B)$109,500.
C)$120,000.
D)$10,500.

Question

Quizplus · Accepted Answer

The increase in accounts receivable balance means that not all credit sales have been collected in cash. Therefore, the amount collected during the year can be calculated by subtracting the increase in accounts receivable from the credit sales:
$120,000 - $10,500 = $109,500. 
Therefore, the correct answer is B.

If Credit Sales for the Year Are $120,000 and the Accounts