When a customer's account is written off:
A)net realizable value of the Accounts Receivable increases.
B)net realizable value of the Accounts Receivable decreases.
C)net realizable value of the Accounts Receivable remains the same.
D)none of the above

Question

Quizplus · Accepted Answer

When a customer's account is written off, the net realizable value of the Accounts Receivable remains the same because the allowance for doubtful accounts, which is an estimate of uncollectible accounts, has already accounted for this potential loss. Writing off an account simply adjusts the accounts receivable and allowance accounts, but does not affect the net realizable value.

When a Customer's Account Is Written Off