The net realizable value of accounts receivable is the difference between gross accounts receivable and:
A)Sales Discounts.
B)Sales Returns and Allowances.
C)Uncollectible-Account Expense.
D)Allowance for Uncollectible Accounts.

Question

Quizplus · Accepted Answer

The net realizable value of accounts receivable is the amount of accounts receivable that a company actually expects to collect. This means that any amount that is deemed uncollectible needs to be deducted from the gross accounts receivable. The Allowance for Uncollectible Accounts is an estimate of the portion of accounts receivable that are expected to be uncollectible, so it is deducted from the gross accounts receivable to arrive at the net realizable value. Therefore, the correct answer is D.

The Net Realizable Value of Accounts Receivable Is the Difference