Gitis,IncUses the Direct Method to Prepare Its Statement of Cash

question 11

Multiple Choice

Gitis,Inc.uses the direct method to prepare its statement of cash flows.Use the following information reported for 2017:
Sales Revenue,$40,000
Interest Revenue,$700
Accounts Receivable,beginning balance,$13,200
Accounts Receivable,ending balance,$28,000
There were no amounts reported for Interest Receivable.
Compute the total cash receipts.

• A)$28,000
• B)$53,200
• C)$25,900
• D)$13,200

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Definitions:

Sufficient Consideration

The concept in contract law that something of value, which is mutually agreed upon by the parties involved, must be exchanged for a contract to be legally binding.

Illusory Agreement

A contract or agreement that appears to be binding but lacks the necessary elements to enforce it, often because terms are too vague or one party has the option not to perform.

Monetary Value

The economic worth assigned to goods, services, or assets in terms of currency.

Promissory Estoppel

A legal principle that prevents a person from going back on a promise, even if it was made without formal consideration, if another person reasonably relied on that promise to their detriment.