
Explanation:
The correct answer is A (3,800). Under accrual accounting, if reported revenue exceeds the cash collected, it typically results in an increase in accounts receivable. The formula to calculate cash collected from customers is:
Substituting the given values:
Option B (5,000) is incorrect because it equals the revenue, ignoring the increase in accounts receivable. Option C (6,200) is incorrect as it adds the increase in accounts receivable to revenue, which is not the correct approach.
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An analyst collects the following financial data (in € thousands) for a company: Revenue: 5,000 Beginning cash balance: 2,000 Ending cash balance: 2,000 Increase in accounts receivable: 1,200 Based on this information, the cash received from customers (in € thousands) is:
A
3,800.
B
5,000.
C
6,200.