Our professor posted this practice exam question, and I'm having trouble understanding why the answer key is correct:
The balance in Accounts Receivable was $650,000 at the beginning of the year and $350,000 at the end of the year. Sales for the year totaled $4,100,000. How much cash was collected from customers during the period?
E) None of the above.
If sales totaled $4.1m, then that figured is composed of the following:
$X of direct cash debits
$Y of accounts receivable
But my professor said we can just assume "sales for the year" is referring to accounts receivable, put the $4.1m on the debit side of the Accounts Receivable T-chart, and then solve that way (getting A, $4.4m). I don't quite understand why this works, as it seems to overlook key information about cash transactions.