In the current accounting period, sales (calculated on an accrual basis) are $180,000 and the cash received from sales is $215,000, therefore:credit sales that occurred in a previous period may have been paid for in the current period.cash sales for the period were greater than credit sales.credit sales that occurred in the current period may not yet have been paid for.none of the options are correct.
Question
In the current accounting period, sales (calculated on an accrual basis) are 215,000, therefore:credit sales that occurred in a previous period may have been paid for in the current period.cash sales for the period were greater than credit sales.credit sales that occurred in the current period may not yet have been paid for.none of the options are correct.
Solution
The correct statement is: "credit sales that occurred in a previous period may have been paid for in the current period."
Here's why:
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"Credit sales that occurred in a previous period may have been paid for in the current period." - This is correct. If the cash received from sales (180,000), it suggests that some of the cash received may have been for sales made on credit in a previous period.
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"Cash sales for the period were greater than credit sales." - This is not necessarily correct. The information provided does not allow us to determine the breakdown of cash sales versus credit sales in the current period.
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"Credit sales that occurred in the current period may not yet have been paid for." - This is not necessarily correct. While it's possible that some credit sales from the current period have not yet been paid for, the information provided does not allow us to determine this.
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"None of the options are correct." - This is not correct, as the first option is a correct interpretation of the information provided.
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