At the End of the Current Year, Accounts Receivable Has

question 126

Multiple Choice

At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,500,000. An analysis of receivables estimates uncollectible receivables as $25,000.​Determine the net realizable value of accounts receivable after adjustment. (Hint: Determine the amount of the adjusting entry for bad debt expense and the adjusted balance of Allowance for Doubtful Accounts.) ​

• A) $550,000
• B) $544,500
• C) $525,000
• D) $575,000

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Definitions:

Past Due Bills

Bills or invoices that have not been paid by the designated due date, often resulting in late fees or penalties.

Pay Bills Window

A feature in financial software that allows users to manage and process payments to vendors or creditors directly from their accounts payable.

Accounts Payable

The amount of money that a company owes to its suppliers or creditors for goods or services received.

Checking Account

A bank account allowing the account holder to deposit and withdraw funds, often through the issuance of checks.