Accounts Receivable Has a Balance of $30,000 and the Allowance

question 103

Multiple Choice

Accounts receivable has a balance of $30,000 and the Allowance for Bad Debts has a credit balance of $3,000. The allowance method is used. What is the net realizable value before and after a $2,000 Account Receivable is written off?

• A)$27,000; $27,000
• B)$14,300; $14,300
• C)$16,000; $15,940
• D)$16,000; $16,000

---

Definitions:

Marginal Costs

The upsurge in complete costs linked to the production of a supplementary unit of a good or service.

Average Variable Costs

The total variable costs of production divided by the quantity of output produced, representing the variable cost per unit of output.

Marginal Cost

The increase or decrease in the total cost that arises when the quantity produced is incremented by one unit.

Average Variable Cost

is the cost that varies with the level of output, calculated by dividing the total variable costs by the quantity of output produced.