Sales on account for the year totaled $200,000. The following information is also available from the accounting system:
Accounts Receivable Balances
Beginning of year.....$30,000
End of year.....25,000
What amount of cash was collected from customers during the year?
$200,000
$195,000
$205,000
$170,000
Accounts Receivable Balances
Beginning of year.....$30,000
End of year.....25,000
What amount of cash was collected from customers during the year?
$200,000
$195,000
$205,000
$170,000
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The balance of Accounts Receivable is the amount customers owe you. When that balance goes down, it means people are paying you. If sales for the year totaled $200,000, and you got another $5000 from people paying what they owed you, then all together you collected $205,000 from customers.