In the given scenario, what is the new accounts receivable balance after collecting $1,000 from a $5,000 balance?

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Multiple Choice

In the given scenario, what is the new accounts receivable balance after collecting $1,000 from a $5,000 balance?

Explanation:
Accounts receivable represents money customers still owe. When you collect a payment, that amount reduces the accounts receivable balance. Here, you started with 5,000 in AR and collected 1,000. Subtracting gives 5,000 − 1,000 = 4,000. So the new accounts receivable balance is 4,000. (The cash you received increases, but the AR line shows 4,000 still owed.)

Accounts receivable represents money customers still owe. When you collect a payment, that amount reduces the accounts receivable balance. Here, you started with 5,000 in AR and collected 1,000. Subtracting gives 5,000 − 1,000 = 4,000. So the new accounts receivable balance is 4,000. (The cash you received increases, but the AR line shows 4,000 still owed.)

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