Question

In reviewing the accounts receivable, the cash realizable value is $16,000 before the write-off of a $1,500 account. what is the cash realizable value after the write-off? $16,000 $17,500 $14,500 $1,500

Answer 1

The cash realizable value is the sum of cash you look forward to get from your accounts receivable after deducting the uncollectable amount. To compute for the cash realizable value, deduct the uncollectable amount from your gross accounts receivable. But since there is no uncollectable amount, the cash realizable value is $16,000.