On 1 May 20X9 Marshall's cash book showed a cash balance of $224 and an overdraft of $336. During the week ended 6 May the following transactions took place. May 1 Sold $160 of goods to P Dixon on credit. May 1 Withdrew $50 of cash from the bank for business use. May 2 Purchased goods from A Clarke on credit for $380 less 15% trade discount. May 2 Repaid a debt of $120 owing to R Hill, taking advantage of a 10% cash discount. The payment was by cheque. May 3 Sold $45 of goods for cash. May 4 Sold $80 of goods to M Maguire on credit, offering a 121/2% discount if payment made within 7 days. May 4 Paid a telephone bill of $210 by cheque. May 4 Purchased $400 of goods on credit from D Daley. May 5 Received a cheque from H Larkin for $180. Larkin has taken advantage of a $20 cash discount offered to him. May 5 Sold $304 of goods to M Donald on credit. May 5 Purchased $135 of goods from Honour Co by cheque. May 6 Received a cheque from D Randle for $482. May 6 Purchased $100 of goods on credit from G Perkins. What is the total of the sales day book? A $544 B $589 C $534 D $579
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
On 1 May 20X9 Marshall's
week ended 6 May the following transactions took place.
May 1 Sold $160 of goods to P Dixon on credit.
May 1 Withdrew $50 of cash from the bank for business use.
May 2 Purchased goods from A Clarke on credit for $380 less 15% trade discount.
May 2 Repaid a debt of $120 owing to R Hill, taking advantage of a 10% cash discount. The
payment was by cheque.
May 3 Sold $45 of goods for cash.
May 4 Sold $80 of goods to M Maguire on credit, offering a 121/2% discount if payment made within
7 days.
May 4 Paid a telephone bill of $210 by cheque.
May 4 Purchased $400 of goods on credit from D Daley.
May 5 Received a cheque from H Larkin for $180. Larkin has taken advantage of a $20 cash
discount offered to him.
May 5 Sold $304 of goods to M Donald on credit.
May 5 Purchased $135 of goods from Honour Co by cheque.
May 6 Received a cheque from D Randle for $482.
May 6 Purchased $100 of goods on credit from G Perkins.
What is the total of the sales day book?
A $544
B $589
C $534
D $579
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