A credit memo of $6,250 is issued against an open invoice of $74,500. If the customer then pays $50,000, what receivable balance remains?
Correct Answer
D) $18,250
The credit reduces the invoice to $68,250; after the $50,000 payment, $18,250 remains.
Why This Is the Correct Answer
The credit reduces the invoice to $68,250; after the $50,000 payment, $18,250 remains.
Why the Other Options Are Wrong
Option A: $12,000
$12,000 is below the supported result for accounts receivable reconciliation; it likely uses the wrong base, period, or account bucket.
Option B: $14,500
$14,500 is below the supported result for accounts receivable reconciliation; it likely uses the wrong base, period, or account bucket.
Option C: $16,250
$16,250 is below the supported result for accounts receivable reconciliation; it likely uses the wrong base, period, or account bucket.
Memory Technique
Office Manager money test: bucket before math for accounts receivable.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section One, Cash and Charge Sales, Accounts Receivable; use the job ledger figures in the stem and recompute the same accounting measure.
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