Question

Company A reports revenue of $386,000 but collects $303,000; end-of-the-year accounts receivable is equal to:

a) $303,000
b) $83,000
c) $386,000
d) $0

Answer 1

The end-of-the-year accounts receivable for Company A is $83,000, calculated as the difference between the total revenue of $386,000 and the cash collected amounting to $303,000.

Step-by-step explanation:

The end-of-the-year accounts receivable for Company A can be calculated by subtracting the amount collected from the reported revenue. The question pertains to determining the end-of-the-year accounts receivable for Company A. The company reported a revenue of $386,000 but only collected $303,000. Considering that reported revenue includes all sales made on credit, the end-of-the-year accounts receivable can be calculated as the difference between the total revenue and the amount of cash collected.

End-of-the-year accounts receivable = Revenue - Cash collected

End-of-the-year accounts receivable = $386,000 - $303,000

End-of-the-year accounts receivable = $83,000

This means the correct answer is (b) $83,000, which is the amount that the company still expects to collect from its credit sales.