The net realizable value of Bay's accounts receivable as of December 31,2012 was
A) $7,000.
B) $3,500.
C) $6,500.
D) $500.

Question

Quizplus · Accepted Answer

The net realizable value of accounts receivable is the amount expected to be collected from customers, which is the gross amount of accounts receivable minus an allowance for doubtful accounts. From the information given, we know that the accounts receivable balance is $7,000 and the allowance for doubtful accounts is $500. Therefore, the net realizable value is $7,000 - $500 = $6,500.

The Net Realizable Value of Bay's Accounts Receivable as of December