During the Year Mike's Bikes Reported That Accounts Receivable Had

question 39

Multiple Choice

During the year Mike's Bikes reported that accounts receivable had increased by $13 000. If accrual basis sales were $118 000 the amount of cash received from customers during the year must have been:

• A) $105 000.
• B) $118 000.
• C) $131 000.
• D) Cannot be calculated from the information provided.

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Definitions:

Cash Flow Statement

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Accrual-Basis Revenues

Earnings recorded when they are earned, regardless of when the cash payment is received, under the accrual method of accounting.

Balance Sheet

An accounting statement that itemizes the assets, liabilities, and equity held by shareholders of a company on a specific date.

Rates Of Return

Measurements of the gain or loss on an investment relative to the amount of money invested.