Asked by Callie Cortez on May 25, 2024
Verified
During the year sales to customers were $300,000. Accounts receivable from customers at the beginning of the year were $75,000 and at the end of the year $100,000. As a result cash inflows from sales to customers totalled?
A) $225,000
B) $325,000
C) $200,000
D) $275,000
Accounts Receivable
Money owed to a company by its customers for products or services that have been delivered or used, but not yet paid for.
Sales to Customers
The transactions where goods or services are sold and delivered to the buyer, generating revenue for the company.
- Assess the operational productivity by examining shifts in working capital.
Verified Answer
MB
Mackenzie BrownMay 28, 2024
Final Answer :
D
Explanation :
To find cash inflows from sales to customers, we need to subtract the change in accounts receivable from sales. Change in accounts receivable = Ending accounts receivable - Beginning accounts receivable = $100,000 - $75,000 = $25,000. Therefore, cash inflows from sales = Sales to customers - Change in accounts receivable = $300,000 - $25,000 = $275,000. So, the correct option is D.
Learning Objectives
- Assess the operational productivity by examining shifts in working capital.
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