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The net amount expected to be received in cash from receivables is called the _____

group of answer choices
a. allowance value.
b. gross cash value.
c. gross realizable value.
d. net cash realizable value.

1 Answer

5 votes

Final answer:

The net amount expected to be received in cash from receivables is known as the net cash realizable value (option d). It represents the total accounts receivable less the allowance for doubtful accounts, showing the expected cash a company will actually collect.

Step-by-step explanation:

The net amount expected to be received in cash from receivables is called the net cash realizable value. This term is utilized to indicate the money that a company expects to collect from its customers after accounting for any potential losses due to customers' inability to pay. The calculation of net cash realizable value generally includes deducting the allowance for doubtful accounts from the total accounts receivable. This provides a more accurate reflection of the actual cash that the company will likely receive.

The process for calculating this value involves two steps. First, you determine the total gross amount of receivables that are expected to be collected. Second, you subtract any allowances for doubtful accounts, which are estimates of uncollectible accounts. The resulting figure is the net cash realizable value.

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User Gunnlaugur Briem
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