XYZ Ltd's Financial Information Includes the Following

question 43

Multiple Choice

XYZ Ltd's financial information includes the following.
Sales $100 000
Accounts receivable balance 1 July 15 30 000
Accounts receivable balance 30 June 16 35 000
Bad debts written off [*] 1 000
Discount allowed 5 000
[*] The journal entry for bad debts written off debited bad debts expense $1000 and credited accounts receivable $1000 (direct write-off method) .
The cash received from customers for the year ended 30 June 16 was:

• A)$89 000.
• B)$91 000.
• C)$94 000.
• D)$101 000.

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Definitions:

Tax System

A tax system is the structured way in which taxes are collected by a government to fund public spending on goods and services.

Ceteris Paribus Error

A mistake in economic reasoning where other relevant factors or variables are assumed to remain constant when they do not.

Causality

The relationship between cause and effect, where one event is understood to be the direct consequence of another.

Memory Loss

The unusual forgetfulness or inability to remember past events and information, often a symptom of neurological conditions.