Question 1

A retail chain is preparing its cash budget for the first quarter. Budgeted sales are as follows:
- January: $100,000
- February: $120,000
- March: $150,000

Historically, 40% of sales are cash sales collected in the month of sale. The remaining 60% are credit sales, which are collected in full in the month following the sale.

Calculate the total cash receipts budgeted for the month of March.

(Enter the numeric value only, without commas or currency symbols)

Accepted Answer

Calculate March cash sales (40% of March sales) and add the cash collected from February's credit sales (60% of February sales).

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Calculating 60% of March sales instead of February sales, or including January sales incorrectly.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 5

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