The net realizable value of trade receivables can be computed by subtracting the balance in allowance for doubtful accounts from the balance in trade receivables.

Question

Quizplus · Accepted Answer

The net realizable value of trade receivables is the amount expected to be collected from the customers after deducting the estimated bad debts. This can be computed by subtracting the balance in allowance for doubtful accounts from the balance in trade receivables. Therefore, the statement is true.

The Net Realizable Value of Trade Receivables Can Be Computed