Question

A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet. The balance of Accounts Receivable can be obtained from the ________.

A) schedule of inventory, purchases, and cost of goods sold budget
B) cash receipts from customers
C) capital expenditures budget
D) selling and administrative expenses budget

Answer 1

The balance of Accounts Receivable is determined from the cash receipts from customers, which helps calculate the expected cash collection from credit sales that is reflected on the budgeted balance sheet.

Step-by-step explanation:

The balance of Accounts Receivable can be obtained from the cash receipts from customers. This component allows the company to see the incoming cash, from sales on credit, that it can expect to collect in the future. The Accounts Receivable is part of the current assets section on the budgeted balance sheet, reflecting the outstanding balances from customers who have not yet paid for their purchases in full. To determine the ending balance of Accounts Receivable, the company evaluates the cash receipts expected from the sales made on credit.

The balance of Accounts Receivable can be obtained from the cash receipts from customers, which is a part of the cash budget. The cash budget tracks the cash inflows and outflows of a company and provides information on the expected cash receipts and payments. Since Accounts Receivable represents the amount of money owed to the company by its customers, the cash receipts from customers will include the payments received for outstanding receivables.