Accounts Receivable From Customers Are Reported At What? | MCQ Answer

On Which Financial Statement And At What Amount Accounts Receivable Are Reported? - A Solution To Multiple Choice Question With Example

Accounts Receivable are reported at Net Realizable Value on the Balance Sheet, which is the amount expected to be collected / received from customers and it is calculated after deducting the value of Allowance For Doubtful Accounts from Accounts Receivable.

So, the correct answer of multiple choice question is “Balance Sheet At The Net Realizable Value”

Example:

If a company has gross amount of Accounts Receivable (Sundry Debtors) of Rs. 52000. The Allowance for Doubtful Accounts is estimated at 4% of Gross Accounts Receivable. What is the value at which, accounts receivable are reported / recorded on the balance sheet.

Here, Allowance of Doubtful Accounts = 52000 X 4% = Rs. 2080

Accounts Receivable to be reported on the balance sheet = Gross Amount of Accounts Receivable - Allowance For Doubtful Accounts

Accounts Receivable to be reported on the balance sheet = 52000 - 2080 = Rs. 49920