Question
In: Accounting
If ending accounts receivable exceeds the beginning accounts receivable: A. cash collections during-the period exceed the...
If ending accounts receivable exceeds the beginning accounts receivable:
A. cash collections during-the period exceed the amount of revenue
earned.
B. net Income for the period is less than the amount of cash basis
income.
C. no cash was collected during the period.
D. cash collections during the year are less than the amount of
revenue earned.
Solutions
Expert Solution
Solution
If ending accounts receivable exceeds the beginning accounts receivable:
The correct option is D. – Cash collections during the year are less than the amount of revenue earned.
Explanation:
The beginning balance of accounts receivable represents the revenue earned during the previous accounting period, but the collections are due in the future accounting period.
The current year revenue earned would increase the accounts receivable balance, while the cash collections reduce the accounts receivable balance.
So, if the cash collections during the current accounting period are higher than the ending accounts receivable balance would be lower.
Likewise, if the ending accounts receivable exceeds the beginning accounts receivable, it indicates that the cash collections during the year are less than the amount of revenue earned. The cash collections are due in the future accounting period.
ekkarill92 answered 2 years agoRelated Solutions
inventory: beginning $21,430 Ending $23,865 Accounts receivable: beginning $15,362 Ending $17,210 accounts payable: beginning $20,416 Ending...
inventory: beginning $21,430 Ending $23,865
Accounts receivable: beginning $15,362 Ending $17,210
accounts payable: beginning $20,416 Ending $21,803
net sales for the year: $243,612
cost of goods sold for the year: $108,915
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November
151,000
December
221,000...
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customers, 30% pay their accounts in the month of sale, while the
remaining 70% pay their accounts in the month following the month
of sale. Projected sales for the next three months are as
follows:
October
$58,000
November
65,000
December
72,000...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit...
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OfficeMart Inc. has "cash and carry" customers and credit
customers. OfficeMart estimates that 20% of monthly sales are to
cash customers, while the remaining sales are to credit customers.
Of the credit customers, 25% pay their accounts in the month of
sale, while the remaining 75% pay their accounts in the month
following the month of sale. Projected sales for the next three
months are as follows:
October
$115,000
November
144,000
December
210,000...
Schedule of Cash Collections of Accounts Receivable OfficeMart Inc. has "cash and carry" customers and credit...
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cash customers, while the remaining sales are to credit customers.
Of the credit customers, 20% pay their accounts in the month of
sale, while the remaining 80% pay their accounts in the month
following the month of sale. Projected sales for the next three
months are as follows:
October
$118,000
November
148,000
December
216,000...
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sale, while the remaining 75% pay their accounts in the month
following the month of sale. Projected sales for the next three
months are as follows:
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135,000
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