The Following Credit Sales Are Budgeted by Gonzalez Company

question 21

Multiple Choice

The following credit sales are budgeted by Gonzalez Company: The company's past experience indicates that 80% of the accounts receivable are collected in the month of sale, 20% in the month following the sale.The anticipated cash inflow for the month of April is

• A)$172,800.
• B)$201,600.
• C)$216,000.
• D)$248,000.

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Definitions:

Collection Period

The average number of days it takes for a business to receive payments owed by its customers, indicating the efficiency of a company's credit and collection policies.

Sales

The total amount of revenue generated by a company from the sale of goods or services before any costs or expenses are deducted.

Accounts Receivable Balance

The entire sum owed by customers to a company for the consumption of goods or services for which payment has not been made.

Cost of Goods Sold

The immediate expenses linked to the creation of products that a company sells.