If Sales Revenue Is $80 Million and Accounts Receivable Increased

question 146

Multiple Choice

If sales revenue is $80 million and accounts receivable increased by $12 million, the amount of cash received from customers:

• A) was $52 million.
• B) was $68 million.
• C) was $80 million.
• D) depends on the mix of cash sales and credit sales.

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Definitions:

Cost Accounting

is a process of recording, classifying, analyzing, and allocating all costs associated with the production process to evaluate financial performance.

Capital Budgeting

The process by which a business evaluates and selects long-term investments that are worth more than their cost to achieve strategic goals.

Cash Flows

The total amount of money being transferred into and out of a business, which affects the company's liquidity.

Initial Cost

The upfront expenditure related to acquiring or starting a new project or investment, not including ongoing or future costs.