Day: March 5, 2023

Alex ltd’s receives payment for:

• 20 % of its sales in the month of sale
• 50 % in the following month
• 30 % two months after the month of sale.

The table shows sales for four months.

• January – £180,000
• February – £240,000
• March – £270,000
• April – £220,000

How much were total cash receipts in April for Alex ltd’s?

Select ONE answer:

1. £220,000
2. £228,000
3. £249,000
4. £251,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – (£251,000 * 0.2) + (£270,000 * 0.5) + (£228,000 * 0.3) = £251,000

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