The net amount expected to be received in cash from receivables is termed the
A)net realizable value.
B)fair value.
C)gross cash value.
D)cash-equivalent value.

Question

Quizplus · Accepted Answer

Net realizable value is the amount of cash that is expected to be received from receivables after deducting any allowances for doubtful accounts or uncollectible amounts. It is the most accurate representation of the true value of the receivables and is used for financial reporting purposes. Fair value is the amount that the receivables could be sold for in an arm's length transaction, and is typically not used for financial reporting purposes. Gross cash value and cash-equivalent value are not commonly used terms in accounting for receivables.

The Net Amount Expected to Be Received in Cash from Receivables