Net Realizable Value of Receivables Is Gross Receivables Minus

question 37

Multiple Choice

Net realizable value of receivables is gross receivables minus

• A)bad debt expense and sales returns.
• B)bad debt expense and estimated returns and allowances.
• C)estimated uncollectibles,and estimated returns and allowances.
• D)proven uncollectibles and estimated returns and allowances.

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Definitions:

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders, often reinvested back into the company.

Share Capital

The funds raised by a company through the issuance of shares, representing the ownership of the company.

Cumulative Preferred Shares

Preferred stock where dividends accumulate if not paid in a given period and must be paid out before any dividends can be paid to common stockholders.

Dividends in Arrears

Unpaid dividends on cumulative preferred stock that must be paid before any dividends can be paid to common shareholders.