An Analysis and Aging of the Accounts Receivable of Kaiten

question 102

Multiple Choice

An analysis and aging of the accounts receivable of Kaiten Company at December 31 revealed the following data: The net realizable value of the accounts receivable at December 31 should be

• A) $475,000
• B) $443,000
• C) $450,000
• D) $443,000.

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Definitions:

Current Assets

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

Fixed Assets

Tangible assets, such as property, plant, and equipment, used in the operating activities of a business and not intended for sale in the normal course of business.

Indirect Method

A way of calculating cash flows for the cash flow statement where net income is adjusted for changes in balance sheet accounts to reflect cash operations.

Statement of Cash Flows

A financial statement showing the cash inflows and outflows from operating, investing, and financing activities over a specific period.