Question

Net accounts receivable is calculated as:

Select one:

A. sales less sales returns and allowances

B. accounts receivable less uncollectible-account expense

C. accounts receivable less allowance for uncollectible accounts

D. accounts receivable plus allowance for uncollectible accounts

Answer 1

Solution: The Answer is C. Accounts receivable less allowance for uncollectible accounts

Explanation:

1) Allowance for uncollectible accounts are the estimate uncollectible accounts receivables.

2) At the year end, this estimated uncollectible will be deducted from accounts receivables to arrive at net accounts receivable.

3) Option A is not correct because sales are not considered in net accounts receivable calculation.

4) Option B is not correct because uncollectible-account expense is writeoff expense during the year.

5) Option D is not correct because estimated uncollectible will be deducted from accounts receivables rather than add.