A Company Had Beginning Accounts Receivable of $175,000

question 86

Multiple Choice

A company had beginning accounts receivable of $175,000. All sales were on account and totaled $550,000. Cash collected from customers totaled $650,000. Calculate the ending accounts receivable balance.

• A)$725,000
• B)$275,000
• C)$ 75,000
• D)$175,000

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Definitions:

Period Cost

Expenses that are not directly tied to production activity and are accounted for within the period they occur, such as selling and administrative expenses.

Net Operating Income

Earnings before interest and taxes (EBIT), representing the profit from regular business operations.

Common Fixed Expenses

Costs that do not change with the level of production or sales over a certain period and are shared among different segments or products of a business.

Total Fixed Expenses

Expenses that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.