RJB Reported Sales of $200,000 and an Increase in Accounts

question 73

Multiple Choice

RJB reported sales of $200,000 and an increase in accounts receivable of $30,000 during 2001. Under the direct method, what would be RJB's cash collected from customers during 2001?

• A) $170,000
• B) $200,000
• C) $230,000
• D) Cannot be determined from information given.

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Definitions:

Cost Center

A department within an organization that does not directly add to profit but still incurs costs.

Indirect Expenses

Expenses that cannot be traced directly to one department.

Percent Of Sales

A financial ratio that compares various components of an income statement to the total sales revenue.

Gross Profit

The difference between sales revenue and the cost of goods sold, before deducting operating expenses.