Question

To calculate the net receivables to be reported on the balance sheet at year-end, a. subtract the balance of Allowance for Doubtful Accounts from Accounts Receivable. b. subtract the balance of Bad Debt Expense from Accounts Receivable. c. add the balance of Bad Debt Expense to Accounts Receivable. d. add the balance of Allowance for Doubtful Accounts to Accounts Receivable.

Answer 1

Answer:

The answer is A.

Explanation:

a. subtract the balance of Allowance for Doubtful Accounts from Accounts Receivable , because

the account receivables is an asset account, so must be subtracted the allowance of doubtful receivables, which functions as a regularizing account of the asset.

Option B is not appropriate since it subtracts the expense recognized in the period and not the total forecast .

and option C and D add  the receivables that are considered doubtful or uncollectible, so it is not appropriate either.