Credit sales from receivables movement

Steps:

• Determine the change in trade receivables: closing balance $65,000 minus opening balance$48,000 equals $17,000 increase.
• Apply the formula for credit sales: cash received from credit customers plus increase in trade receivables.
• Calculate: $27,000 plus$17,000 equals $44,000.
• Ignore trade discount, irrecoverable debt, and allowance increase as they do not affect the basic receivables movement for credit sales.

Why B is correct:

• Matches the accounting formula: credit sales = cash collections + (closing receivables – opening receivables), reflecting amounts owed from sales.

Why the others are wrong:

• A: Understates by omitting full receivables increase.
• C: Overstates, possibly adding irrecoverable debt erroneously.
• D: Overstates further, perhaps including allowance increase.

Final answer: B