I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

QUESTION 

Calculating sales

 

The calculation above could be made in a T-account, with credit sales being the balancing figure to 

complete the account. Prepare the T-account. 

ANSWER 

TRADE RECEIVABLES 

 

$ 

 

$ 

Opening balance b/f 

   1,750 

 

Cash received 

 

28,490 

Credit sales (balancing figure) 

 29,880 

 

Closing balance c/f 

 

  3,140 

 

 31,630 

 

 

31,630 

 

The same interrelationship between credit sales, cash from receivables, and opening and closing 

receivables balances can be used to derive a missing figure for cash from receivables, or opening or 

closing receivables, given the values for the three other items. For example, if we know that opening 

receivables are $6,700, closing receivables are $3,200 and credit sales for the period are $69,400, 

then cash from receivables during the period would be as follows. 

TRADE RECEIVABLES 

 

$ 

 

$      

Opening balance 

6,700 

 

Cash received (balancing figure) 

 72,900 

Sales (on credit) 

 69,400 

 

Closing balance c/f 

   3,200 

 

 76,100 

 

 76,100 

An alternative way of presenting the same calculation would be: 

 

$      

Opening balance of receivables 

 

6,700 

Credit sales during the period 

 

69,400 

Total money owed to the business 

 

76,100 

Less closing balance of receivables 

 (3,200) 

Equals cash received during the period 

 

72,900 

 

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