The balance in the Accounts Receivable account decreased from $18,000 at the beginning of the month to $15,000 at the end of the month. Sales on account during the month totaled $130,000. No accounts receivable were written off as uncollectible during the month. Cash collections of accounts receivable during the month totaled:

a. 127,000
b. 130,000
c. 133,000
d. 145,000

 The answer is c. 133,000.

Explanation: Accounts receivable is a current asset in the balance sheet (statement of financial position). Meaning, it easily can be converted to cash. The amount schedule of account receivable usually looks like this:

Opening balance               $18,000

+Addition                              130,000

-Receipt (cash)                          X

=Closing balance                $15,000

To find X, simply change the subject of the formula as:

$18,000 + $130,000 - X = $15,000

$148,000 - X = $15,000

X = $148,000 - $15,000

X = $133,000 Receipt (cash)

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