The following information is relevant to the calculation of the sales figure for Alpha, a sole trader who does not keep proper accounting records: $ Opening accounts receivable 29,100 Cash received from credit customers and paid into the bank 381,600 Expenses paid out of cash received from credit customers before banking 6,800 Irrecoverable debts written off 7,200 Refunds to credit customers 2,100 Discounts allowed to credit customers 9,400 Cash sales 112,900 Closing accounts receivable 38,600 Which of the following should appear in Alpha's trading account for sales? A $525,300 B $511,700 C $529,500 D $510,900
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.
The following information is relevant to the calculation of the sales figure for Alpha, a sole trader who
does not keep proper accounting records:
$
Opening
Cash received from credit customers and paid into the bank 381,600
Expenses paid out of cash received from credit customers before banking 6,800
Irrecoverable debts written off 7,200
Refunds to credit customers 2,100
Discounts allowed to credit customers 9,400
Cash sales 112,900
Closing accounts receivable 38,600
Which of the following should appear in Alpha's trading account for sales?
A $525,300
B $511,700
C $529,500
D $510,900
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