Accounts Receivable Has a Balance of $34,000,and the Allowance for Bad

question 125

Multiple Choice

Accounts Receivable has a balance of $34,000,and the Allowance for Bad Debts has a credit balance of $3,400.The allowance method is used.What is the net realizable value of Accounts Receivable before and after a $2,300 account receivable is written off?

• A)$30,600;$30,600
• B)$28,300;$28,300
• C)$30,600;$28,300
• D)$28,300;$32,900

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations using its current assets.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year's time, including cash, inventory, and receivables.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle.

Ratios

A quantitative relationship between two numbers, showing how many times one value contains or is contained within the other.