An Analysis and Aging of the Accounts Receivable of Downs

question 225

Multiple Choice

An analysis and aging of the accounts receivable of Downs Company at December 31 revealed the following data: $\begin{array}{lrr} \text { Accounts Receivable } &\$800,000\\ \text { Allowance for Doubtful Accounts per books } &\\ \text { before adjustment (Cr.) } &50,000\\ \text {Amounts expected to become uncollectible } &53,000\\\end{array}$

The cash realizable value of the accounts receivable at December 31 after adjustment is:

• A) $694000.
• B) $747000.
• C) $750000.
• D) $794000.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.

Deferred Revenues

Deferred revenues refer to money received by a business for goods or services yet to be delivered or performed, recorded as a liability on the balance sheet until the obligation is fulfilled.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of a business.