An Analysis and Aging of Accounts Receivable of the Lucille

question 66

Multiple Choice

An analysis and aging of accounts receivable of the Lucille Company at December 31, 2011, showed the following:

Compute the net realizable value of the accounts receivable of Lucille Company at December 31, 2011.

• A) $804,000
• B) $799,200
• C) $763,200
• D) $727,200

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Definitions:

Inventory Management

Inventory management involves overseeing and controlling the ordering, storing, and use of components that a company will use in the production of the items it will sell as well as the managing of quantities of finished products.

Collection Policy

Procedures followed by a firm in collecting accounts receivable.

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered but not yet paid for.

Credit Extension

The practice of providing borrowers additional time to pay off existing debts, often involving modified repayment terms or agreements.