There was a practice question I had come across and don’t understand it. Please could someone help;
You are given the following information:
Recievables at 1 Jan 2013 is £10,000
Recievables at 31 December 2013 is £9000
Total recipts during 2013 (including £5000 in cash sales) £85,000
What are sales on credit during 2013?
I am confused as are recievables at the beginning of the year not added?
In future you must ask in the Ask the Tutor Forum if you want me to answer – this forum is for students to help each other.
The cash received from credit sales is 85,000 – 5,000 = 80,000.
10,000 of this cash will be money that was owed at the start of the year, leaving only 70,000 relating to this years sales. In addition they are still owed 9,000 at the end of the year, which means that the total credit sales will have been 79,000.
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