An important issue in valuing accounts receivable is
A)the amount of notes receivable in relation to accounts receivable.
B)calculation of the net realizable value.
C)proper recording of sales discounts and sales allowances.
D)doing a thorough credit check on your customers.

Question

Quizplus · Accepted Answer

The net realizable value is the amount of accounts receivable that a company expects to collect. It is calculated by subtracting the allowance for doubtful accounts from the total accounts receivable. This is an important issue in valuing accounts receivable because it gives insight into the company's financial health and ability to collect outstanding debts. A, C, and D are also important factors to consider when managing accounts receivable, but they are not as critical to the valuation process.

An Important Issue in Valuing Accounts Receivable Is