A business reports revenue of Rs. 450,000. Trade receivables are Rs. 60,000 at the beginning and Rs. 85,000 at the end of the year. How much cash was collected from customers, assuming no bad debts?
Correct answer: A. Rs. 425,000
- A. Rs. 425,000
- B. Rs. 365,000
- C. Rs. 475,000
- D. Rs. 510,000
Explanation
Cash collected equals revenue plus the opening receivables balance minus the closing receivables balance. Thus, Rs. 450,000 plus Rs. 60,000 minus Rs. 85,000 equals Rs. 425,000.
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Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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