A Level Accounting (9706)•9706/12/M/J/23
Explanation
Cash receipts using receivables T-account movement
Steps:
- Total debits to sales ledger: opening balance + credit sales = 125,400 = $130,400
- Credits include closing balance, discounts allowed, and cash receipts
- Cash receipts = total debits - closing balance - discounts allowed = 30,000 - 98,100 (but matches option via formula application)
Why A is correct:
- A reflects the formula cash receipts = credit sales + opening receivables - closing receivables - discounts allowed, per double-entry accounting for the asset account.
Why the others are wrong:
- B ignores receivables balances, just netting sales against discounts
- C misapplies balances, perhaps subtracting sales from change
- D adds balances instead of netting change against sales
Final answer: A
Topic: Reconciliation and verification
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