Question

At the end of the accounting period Anderson Company had $4,500 in accounts receivable and $500 in its allowance for doubtful accounts account. Based on this information the net realizable value of accounts receivable is:_______

a. $4,000
b. $4,500.
c. $5,000.
d. The answer cannot be determined with the information provided.

Answer 1

Answer:

Option (a) is correct.

Explanation:

Given that,

Accounts receivable at the end of the accounting period = $4,500

Allowance for doubtful accounts account = $500

Net realizable value of accounts receivable:

= Accounts receivable at the end of the accounting period - Allowance for doubtful accounts account

= $4,500 - $500

= $4,000

Therefore, the net realizable value of accounts receivable is $4,000.