ACCA Applied Knowledge · Financial Accounting · Incomplete records
Mara, a sole trader, keeps no sales ledger. Opening trade receivables were $12,400 and closing trade receivables were $15,100. Cash received from credit customers during the year was $88,600. What were her credit sales for the year?
Credit sales were $91,300. In a receivables control account, opening balance plus sales equals cash received plus closing balance, so sales equal 88,600 plus 15,100 less 12,400. Subtracting the increase in receivables instead gives the wrong figure of $85,900.
- A$91,300Correct
- B$85,900
- C$103,700
- D$76,200
Explanation
Reconstruct the receivables control account: opening 12,400 + credit sales = receipts 88,600 + closing 15,100. Credit sales = 88,600 + 15,100 - 12,400 = 91,300. The figure of 85,900 arises from reversing the movement in receivables.
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