Beginning accounts receivable plus _____________ less collections equals _____________.

• A. accounts payable, ending accounts receivable
• B. sales, ending accounts receivable
• C. inventory, ending accounts payable
• D. None of these are correct.

Answer: (B)

Ending accounts receivable reflects what customers still owe at the end of the period. You start with the beginning accounts receivable, add the amount of sales made on credit during the period, and subtract the cash collected from those customers. The remaining balance is the ending accounts receivable. Therefore, the blank is filled with sales (more precisely, credit sales), because credit sales generate new receivables, while collections reduce them. Other items like accounts payable or inventory don’t directly affect this AR calculation.