Texter Company Has a Balance of $65,000 in Accounts Receivable

question 9

Multiple Choice

Texter Company has a balance of $65,000 in Accounts Receivable and a $5,000 credit balance in Allowance for Doubtful Accounts. If a specific customer's account with a balance of $500 is written off as uncollectible, the cash (or net) realizable value of the accounts receivable will be:

• A) $64,500.
• B) $60,000.
• C) $65,500.
• D) $60,500.

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Definitions:

Annual Sales

Annual sales is the total amount of sales or revenue a company generates in a fiscal year.

Retailer

A retailer is a business or person that sells goods directly to consumers for personal or household consumption.

Short-Term Financing Policies

Strategies a company uses to manage its immediate or short-term financial needs and operational expenses.

Conservative Financing Policy

A financial strategy that prioritizes safety and liquidity, often characterized by maintaining high cash reserves and using less leverage.