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Receivables at 1/1/20X3 10000$
Receivables 31/12/20X3 9000$
Total receipts during 20X3 (including 5000$ cash sales) 85000$
What was the sales revenue figure for 20X3?
The given answer says 84000$
And the calculation is Total receipts 85000 + C/F 31/12/20X3 9000 = 94000$
940000 – 10000 = 84000
My question is, why is the whole amount of receipts included on the trade receivables T account even though it includes cash sales?
You will get the same answer even if you treat the cash sales separately.
If you ignore initially the cash sales, then the credit sales are 80,000 + 9,000 – 10,000 = 79,000.
In addition there are cash sales of 5,000.
So the total sales revenue is 79,000 + 5,000 = 84,000.