North Rustico Inc

question 94

Multiple Choice

North Rustico Inc.'s average collection period for accounts receivable is 5.5.If credit sales were $1,200,000 and ending accounts receivable were $200,000, what would be the opening accounts receivable balance?

• A)$100,000
• B)$200,000
• C)$218,181
• D)$236,363

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Definitions:

Retained Earnings

The portion of net earnings not distributed as dividends to shareholders, but retained by the company to be reinvested in its core business or to pay debt.

Permanent Account

Accounts that carry their ending balances over into the next accounting period, typically including assets, liabilities, and equity accounts.

Statement Of Changes

A financial statement that shows how a company's equity has changed during a specific period due to various factors like profits, losses, and dividend payments.

Shareholders' Equity

The residual interest or ownership held by investors in the assets of a corporation after deducting all its liabilities.