Cash Management Practice Exam question help

Tab84Tab84 Just JoinedPosts: 2Registered
Hope one of you can help. I cant seem to get my head round this question in the 2nd practice exam

On January 1 the trade recievables balance for a business was £149,620 and the balance at 31st March was £136,280. The total sales for the 3 month period, shown in the income statement was £482,140. Cash sales accounted for 5% of sales on the income statement.

(c) Calculate the total cash recieved in respect of credit sales in the period january 1 to 31 march.


My Calculation was.

149,620-136,280= 13,340
13,340+482,140= 495,480
495,480*.95=470,706

My answer = 470,706
Correct answer = 471,373

Can someone please help me work out where i went wrong?

Thanks in advance

Comments

  • billdoorbilldoor Well-Known Posts: 129Registered
    Hi, you're approaching it from the wrong angle.

    Start with the total sales figure of £482140. 5% of these are cash sales so:

    482140 x 0.95 = 458033

    We then expect that the opening balance will have been paid so add that figure:

    458033 + 149620 = 607653

    And we're left with a closing balance which hasn't been paid yet so we deduct that:

    607653 - 136280 = 471373.


    The way I remember this is to just start with the total sales figure for the period, and find the correct portion of this, i.e. in this case 95% of it.

    Then just add the opening balance and then deduct the closing balance.

    Hope this helps.:001_smile:
  • Tab84Tab84 Just Joined Posts: 2Registered
    Thanks for that. Thats cleared it up for me
  • Kelly7Kelly7 Well-Known Posts: 218Registered
    Does anyone know if the exam for this is similar to the practice assessments on the aat site?
    X
  • liveprincessliveprincess Well-Known Posts: 214Registered
    I found it very different to the practice assessments on the aat website. It's even hard to describe in what way it was different, just the lay out and the way questions were asked..
  • billdoorbilldoor Well-Known Posts: 129Registered
    CMGT is the only module I've done so far that was different to the practice assessments; as liveprincess says, it's difficult to say why it was different, to me it seemed as though the questions were similar but asked from a different angle.

    The key is just being prepared and making sure you're confident with what you've learned in your studies, if so you'll be okay - just thrown slightly if you're expecting the format to be just like the practice assesments.
  • TyJacTyJac Feels At Home Posts: 42Registered
    I taken Cash management exam today and I managed to pass the exam with all questions exceeded, except for two questions which I didn't meet!

    If you learned the principles behind the calculations you be fine, however, their use of words in the exam is slightly more hard to understand, so read carefully before attempting to bang out some answers. I didn't meet on one of the lagging purchase payment question, due to the layout structured differently, with opening purchases which you'd to lag the payment and stuff, all in all, that question contained too much info to take in.
  • Kelly7Kelly7 Well-Known Posts: 218Registered
    Thanks guys. My tutor said our college pass rate for this exam is around 50% so not holding out much hope.
    My exam is next Thursday, all I can do is give it my best shot though and hope I get through it. We do have re-sits 19th Dec though so there's still another chance to get this out of the way before Christmas lol.

    x
    shibiru
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