The amount of Accounts Receivable a company expects it will collect is the:
A)Gross Accounts Receivable.
B)Bad Debts Allowance.
C)Bad Debts Expense.
D)Net Realizable Value.

Question

Quizplus · Accepted Answer

The amount of accounts receivable a company expects to collect is called the net realizable value. This is the difference between the gross accounts receivable and the bad debts allowance, which represents the amount the company estimates it will not be able to collect. The bad debts expense is the amount recognized as an expense in the period, based on an estimate of the amount of accounts receivable that will not be collected.

The Amount of Accounts Receivable a Company Expects It Will