Accounts Receivable Arising from Sales to Customers Amounted to $35,000

question 71

Multiple Choice

Accounts receivable arising from sales to customers amounted to $35,000 and $40,000 at the beginning and end of 2022, respectively.Income reported on the income statement for the year was $223,000.Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

• A)$223,000.
• B)$228,000.
• C)$258,000.
• D)$218,000.

---

Definitions:

Adjusting Entry

An adjustment recorded in the bookkeeping records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Bad Debt Expense

The estimated amount of credit sales that are not expected to be collected, recognized as an expense in the income statement.

Uncollectible Accounts

Accounts receivable that a company does not expect to collect and writes off as a bad debt expense.

Outstanding Accounts Receivable

Amounts due to a company from customers for goods or services provided on credit but not yet paid.