A company reports net accounts receivable of $152,000 on its December 31, 2019 balance sheet. The Allowance for Bad Debts has a credit balance of $19,000. What is the balance of Accounts Receivable?

Question

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The balance of Accounts Receivable before adjusting for the Allowance for Bad Debts is found by adding the net accounts receivable ($152,000) and the Allowance for Bad Debts ($19,000), which equals $171,000. This is because the Allowance for Bad Debts is a contra asset account that reduces the total Accounts Receivable to its net realizable value.

A Company Reports Net Accounts Receivable of $152,000 on Its