The Face Amount of Accounts Receivable for Rio Inc

question 47

Multiple Choice

The face amount of accounts receivable for Rio Inc. is $20,000. It was estimated that 5% of the accounts will not be collected, cash discounts of $500 will be exercised, and $200 of sales returns will be experienced. The net realizable value of accounts receivable is

• A)$19,500
• B)$19,300
• C)$20,000
• D)$18,300

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Definitions:

IFRS Guidelines

The set of international accounting standards and principles that guide how financial statements should be prepared and disclosed.

Impairment Loss

A reduction in the recoverable amount of a fixed asset or goodwill below its carrying amount recorded on the balance sheet.

Input Market

The marketplace where resources or raw materials that a company uses to produce its products are bought and sold.

Long-lived Assets

Assets that are expected to provide economic benefits over a period of time longer than one fiscal year.