Asked by OfficialAuzzi Clitnovici on May 10, 2024
Verified
In reviewing the accounts receivable the cash realizable value is $14000 before the write-off of a $1800 account. What is the cash realizable value after the write-off?
A) $1800
B) $12200
C) $14000
D) $15800
Cash Realizable Value
The amount of cash expected to be obtained from the current sale or disposal of an asset after deducting any selling costs.
Accounts Receivable
Amounts outstanding from customers to a firm for goods or services that have been supplied but remain unpaid.
- Understand the processes involved in writing off a bad debt and its impact on the balance of the accounting equation.
- Compute modifications for doubtful accounts expense and comprehend their effect on the cash realizable value.
Verified Answer
BM
Bruna MansurMay 14, 2024
Final Answer :
C
Explanation :
The cash realizable value remains $14,000 after the write-off because the write-off of an account receivable does not affect the total cash realizable value; it merely adjusts the accounts receivable and allowance for doubtful accounts balances.
Learning Objectives
- Understand the processes involved in writing off a bad debt and its impact on the balance of the accounting equation.
- Compute modifications for doubtful accounts expense and comprehend their effect on the cash realizable value.
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