Which of the following is false? O Most companies report receivables on their ba

Question

Which of the following is false? O Most companies report receivables on their balance shets at the net realizable value O The face value of Accounts Recevable plus the balance in the Allowance for Doubtful Accounts is equal t the net realizable value of the receivables. of accounting for uncollectible receivables requires an estimate of the amount of receivables that will not be collected Willis Company had S200,000 in credit sales for 2016, and it estimated that 2% of the credit sales would not be collected The balance in Accounts Receivable at the end of the year was $38,000. Willis had never used the allowance method to account for its receivables till 2016. The net realizable value of its accounts receivable at the end of the year was $34,000

Explanation / Answer

2nd option is false.

Because the net realizable value of the receivable = Face value of the accounts receivable - allowance for doubtful accounts.

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