Fit City estimates it will collect $2,300 of the $2,425 owed by customers.The estimated collectible amount is called:

Question

Quizplus · Accepted Answer

The estimated collectible amount is the Net Realizable Value, which is the expected amount a company will receive from its accounts receivable after deducting the estimated portion that will not be collected (i.e., the allowance for doubtful accounts or bad debts allowance). Therefore, option B is the correct choice. Option A refers to the estimated amount of uncollectible accounts, while option C refers to the contra-asset account that reduces the gross accounts receivable to the net realizable value. Option D simply refers to the total amount owed by customers, which is not relevant to the question.

Fit City Estimates It Will Collect $2,300 of the $2,425