Based on the information below, and assuming no other transactions occurred other than those...

Question:

Based on the information below, and assuming no other transactions occurred other than those provided, the amount of accounts receivable collected during 2015 was $ _____.

Beginning balance:
Accounts receivable $375,000
Ending balance:
Accounts receivable $225,000

Collection Period:

A firm can sell its goods either in cash or by credit whereby the buyer possesses the goods without paying for the full cost upfront. A firm may adopt a credit policy inorder to attract more customers. The period that the buyer is supposed to pay the amount due to the company is usually determined by the credit terms in the credit policy.

Answer and Explanation:

The decrease in the account receivable represents the amount that was collected during the year. Therefore, the amount of account receivable collected during the year will be estimated as follows:

  • {eq}\text{Amount collected= Beginning account receivable balance-Ending balance of account receivable} {/eq}
  • {eq}\text{Amount collected}= $375,000-225,000 {/eq}
  • {eq}\text{Amount collected}= $150,000 {/eq}

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Accounts Receivable Journal Entries

from Financial Accounting: Homework Help Resource

Chapter 3 / Lesson 20
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