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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Total receipts adverse variance
In below table, the question was to specify correct variance, whether adverse (A) or favourable (F). Below are the correct answers. Now my question is (which i don’t understand) why is total receipts variance adverse? compare to budgeted amount, actual receipt is more, as a result of more credit sale than budgeted, which should be favourable since we are having more receipts?
If you could please clarify. Thanks
Budgeted $ Actual $ Variance Value $ A/F
Receipts 46300 51800 5500 A
Payments 43000 49300 6300 A
Net Cash flow 3300 2500 800 A
The receipts variance is not adverse – I can only assume that there is a typing error in your book.