Accounts receivable has a balance of $31,000 and the Allowance for doubtful debts has a credit balance of $3100.The allowance method is used.What is the net realisable value before and after a $2400 Account receivable is written off?
A)$27,900;$25,500
B)$25,500;$25,500
C)$25,500;$30,300
D)$27,900;$27,900

Question

Quizplus · Accepted Answer

The net realizable value is calculated as Accounts Receivable minus Allowance for Doubtful Debts. Before the write-off, it is $31,000 - $3,100 = $27,900. After writing off $2,400, both Accounts Receivable and Allowance for Doubtful Debts decrease by $2,400, so the net realizable value remains $27,900.

Accounts Receivable Has a Balance of $31,000 and the Allowance