Practice Assessment 2, Task 1

gabriellenlewis

How do we calculate Receipts from Trade Receivables and Receipts from Trade Payables?

GMS1992

You should look back over "T" accounts.
Use the opening and closing figures and turnover and purchase figures.
Be careful that a percentage of turnover is cash so will not be included in trade receivables.

gabriellenlewis

GMS1992 said:

You should look back over "T" accounts.
Use the opening and closing figures and turnover and purchase figures.
Be careful that a percentage of turnover is cash so will not be included in trade receivables.

If closing receivables figure for period 5 was 890 and closing in period 6 was 845 then that would surely mean 45 had been received (receipts) in that period?

Or if i do this:

1520 (turnover) + 45 (received) = 1565
1565 - 304 (cash) = 1261

I get the correct answer, but if i'm subtracting the cash received then i should be left with receivables received plus receivables outstanding?!