ACCA Applied Knowledge · Financial Accounting · Incomplete records
Ravi's records show opening trade receivables of $8,400, closing trade receivables of $9,600, cash received from credit customers of $71,000 and discounts allowed of $1,000. No irrecoverable debts occurred. What were Ravi's credit sales for the year?
Credit sales are the balancing figure in the receivables account: closing 9,600 plus cash 71,000 and discounts 1,000 less opening 8,400 equals $73,200. Discounts allowed must be included because they settle receivables without cash.
- A$73,200Correct
- B$71,000
- C$72,000
- D$74,200
Explanation
Receivables control: opening 8,400 + credit sales - cash 71,000 - discounts 1,000 = closing 9,600. Credit sales = 9,600 + 72,000 - 8,400 = 73,200. Ignoring discounts gives 72,200 and is wrong because discounts also reduce receivables.
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