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8 May, 12:00

harleston, Inc. has Accounts Receivable of $280,000 and an Allowance for Doubtful Accounts of $18,000. If it writes-off a customer account balance of $1,800, what is the amount of its net accounts receivable? Multiple Choice $280,000 $262,000 $278,200 $260,200

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  1. 8 May, 13:39
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    The correct answer is $262,000

    Explanation:

    Net Accounts receivable alludes to the sum that the organization will really get from its clients when they would make the installment for credit deals made to them.

    Allowance for Doubtful Accounts is the sum the organization expects it won't get from its clients and subsequently it would not bring about assortment from credit deals.

    Thus,

    Net Accounts receivable = Gross Accounts receivable - Allowance for Doubtful Accounts

    Net Accounts receivable = $280,000 - $18,000

    Net Accounts receivable = $262,000

    Note: The Amount discounted will have no effect on the Net Accounts receivable as it is now included for Allowance for Doubtful Accounts and in this way no treatment of $1,800 is required
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