Question 4 2 points A company reported annual sales revenue

Question 4 (2 points)

A company reported annual sales revenue of $1,800,000. During the year, accounts receivables decreased by $8,000. How much cash was collected from customers for the year?

Question 4 options:

a)

$ 1,808,000

b)

$ 1,964,000

c)

$ 1,796,000

d)

$ 1,820,000

Solution

Answer is option a) $1,808,000

The account receivable shows a difference of $8000. We will add the $8000 to the $1800000 sales revenue to arrive at the amount of cash collected from customers for the year,

$1,800,000 + $8,000 = $1,808,000.

Had the account receivable balance increased, we would have subtracted the amount from the sales revenue.