Deck 6: Receivables: Selling a Product or a Service

Question 1

Selling additional shares of stock is a(n)

A) Operating activity
B) Investing activity
C) Financing activity
D) Revenue activity

Answer 1

C

Question 2

The accounting term for the recording of a sale through a journal entry is

A) Revenue Accrual
B) Revenue Recognition
C) Receipt of Revenue
D) Sales Transaction

Answer 2

B

Question 3

Goofy Golf, sells high-quality golf clubs. On May 9, Goofy Golf sold five sets of golf clubs at a price of $500 each. Each set was sold for $100 cash and the rest on credit. The journal entry to record the recognition of revenue is

A)
$\begin{array}{cc}\text { Accounts Receivable } & 2,000 \\\text { Sales Revenue } & 2,000\end{array}$
B)
$\begin{array}{lll}\text { Cash } & 500 \\\text { Sales Revenue } & & 500\end{array}$
C)
$\begin{array} { l c } \text { Cash } & 500 \\\text { Accounts Receivable } & 2,000 \\\text { Sales Revenue } & 2,500\end{array}$
D)
$\begin{array}{lc}\text { Sales Revenue } & 2,500 \\\text { Cash } & 500\\\text { Accounts Receivable }&2,000\end{array}$

Answer 3

$\begin{array} { l c } \text { Cash } & 500 \\\text { Accounts Receivable } & 2,000 \\\text { Sales Revenue } & 2,500\end{array}$

Question 4

Revenues are most often recognized when

A) A sale takes place or a service is performed
B) Cash is collected
C) Inventory is purchased for resale
D) Inventory is manufactured for resale

Question 5

Which type of the major activities of a business are best described as those events involve the purchase of assets for use in the business?

A) Financing activities
B) Operating activities
C) Investing activities
D) Earning activities

Question 6

Which type of the major activities of a business are best described as those events that raise money by means other than operations?

A) Financing activities
B) Operating activities
C) Investing activities
D) Earning activities

Question 7

On June 30, Parrott Company sold goods for $800 on account. The journal entry to record the recognition of revenue would include

A) A debit to cash of $800.
B) A debit to sales revenue of $800.
C) A credit to sales revenue of $800.
D) A credit to accounts receivable of $800.

Question 8

Investing in stocks or bonds of another company is a(n)

A) Operating activity
B) Investing activity
C) Financing activity
D) Revenue activity

Question 9

Selling products or services is a(n)

A) Operating activity
B) Investing activity
C) Financing activity
D) Revenue activity

Question 10

The two criteria that need to be met in order revenue to be recognized are

A) Work has been started and cash collection is reasonably assured.
B) Work has been started and cash collection has occurred.
C) Work has been substantially completed and cash collection is reasonably assured.
D) Work has been substantially completed and cash collection has occurred.

Question 11

Sales Discounts is which type of account?

A) Revenue
B) Contra-revenue
C) Expense
D) Contra-expense

Question 12

Selling property, plant, and equipment is a(n)

A) Operating activity
B) Investing activity
C) Financing activity
D) Revenue activity

Question 13

The Talmage Company owns several shopping malls. One of the shopping malls is undergoing an underground renovation. Copeland Construction is the construction company that is performing these renovations. According to GAAP, when is the most appropriate time to recognize revenue from this construction project?

A) When the contract to perform the service was signed
B) When the construction work was started
C) At the end of each year, as a percentage completed for that year
D) After the project is completely finished

Question 14

Which of the following accounts would normally be found on the income statement?

A) Unearned Service Revenues
B) Accounts Receivable
C) Taxes Payable
D) Sales Discounts

Question 15

Which of the following accounts would normally be found on the income statement?

A) Unearned Service Revenues
B) Rent Payable
C) Sales Returns and Allowances
D) Cash

Question 16

Sally is a college student who decided that she spends entirely too much time inside of the library studying. She decided to join a health club in order to become more active. After researching several Health Clubs and Gyms, Sally decided to purchase a membership at Deseret Health Club. Sally bought a contract for one year. Upon signing this contract, Sally agreed to pay an upfront membership fee, which will ensure use of the health facilities during the full year. She also agreed to pay a monthly fee that will be paid at the beginning of each month during the length of the contract. According to GAAP and assuming that the up-front fee does not relate to a specific activity and is nonrefundable, when is the best time for Deseret Health Club to recognize the revenue for the up-front fee paid by Sally?

A) Recognize it as soon as cash is received from Sally
B) Recognize it at the end of one year (at the end of Sally's contract)
C) Recognize it six months after the contract is signed
D) Allocate it over the life of the contract and recognize it as time passes

Question 17

Sales Returns and Allowances is which type of account?

A) Revenue
B) Contra-revenue
C) Expense
D) Contra-expense

Question 18

The major activities of a business include all BUT which of the following?

A) Financing activities
B) Operating activities
C) Investing activities
D) Earning activities

Question 19

Buying inventory is an example of a(n)

A) Operating activity
B) Investing activity
C) Financing activity
D) Revenue activity

Question 20

Which type of the major activities of a business are best described as those events that are associated with the primary purpose of a business?

A) Financing activities
B) Operating activities
C) Investing activities
D) Earning activities

Question 21

Edwards Company sells foods wholesale. On January 15, Edwards sold 100 cases of beans to Swoops Company for $3 per case with terms of 2/10, n/30. On January 25, Swoops Company paid Edwards the full amount due. Given this information, the entry to record the collection of cash by Edwards Company on January 25 would include a debit to

A) Cash of $294
B) Accounts Receivable of $300
C) Cash of $300
D) Accounts Receivable of $294

Question 22

Edwards Company sells foods wholesale. On January 15, Edwards sold 100 cases of beans to Swoops Company for $3 per case with terms of 2/10, n/30. On February 14, Swoops Company paid Edwards the full amount due. Given this information, the entry to record the collection of cash by Edwards Company on February 14 would include a debit to

A) Cash of $294
B) Accounts Receivable of $300
C) Cash of $300
D) Accounts Receivable of $294

Question 23

Charles Company sells foods wholesale. On May 15, Edwards sold 400 cases of beans to Robin Company for $8 per case with terms of 2/10, n/30. On May 25, Robin Company paid Charles the full amount due. Given these data, the entry to record the sale of beans on May 15 would include a

A) Debit to Sales Revenue of $3,200
B) Credit to Cash of $3,200
C) Debit to Accounts Receivable of $3,200
D) Credit to Sales Revenue of $3,136

Question 24

When the direct write-off method of recognizing bad debt expense is used, the entry to write off a specific customer account would

A) Increase net income
B) Have no effect on net income
C) Increase the accounts receivable balance and increase net income
D) Decrease the accounts receivable balance and decrease net income

Question 25

The direct write-off method

A) Complies with the matching principle
B) Is acceptable from a theoretical point of view
C) Is only acceptable if bad debts are small, insignificant amounts
D) Is the primary method used to recognize Bad Debt Expense

Question 26

Jones Company, a customer, has been authorized to return $1,000 of goods purchased on account. The journal entry to record this transaction is

A)
$\begin{array}{cc}\text { Sales Returns and Allowances } & 1,000 \\\text { Accounts Receivable } & 1,000\end{array}$
B)
Sales $\quad 1,000$
Sales Returns and Allowances $\quad 1,000$
C)
$\begin{array}{lr}\text { Sales Returns and Allowances } & 1,000 \\\text { Inventory } & 1,000\end{array}$
D)
$\begin{array}{lll}\text { Accounts Receivable } & 1,000 & \\\text { Sales Returns and Allowances }\end{array} 1,000$

Question 27

Amy Company sold $8,000 of merchandise to Tory Turnbull with terms 2/10, n/30. If Tory paid for three-fourths of the merchandise within the discount period and one-fourth after the discount period, he paid a total of

A) $7,840
B) $7,880
C) $7,920
D) $7,960

Question 28

The direct write-off method of accounting for bad debts

A) Often fails to match bad debt losses with sales for the same period
B) Is subject to a significant amount of estimation error
C) Causes accounts receivable to appear on the balance sheet at their estimated net realizable value
D) Requires that losses from bad debts be recorded in the period in which sales are made

Question 29

Amy Company sold $8,000 of merchandise to Tory Turnbull with terms 2/10, n/30. If Tory paid for all of the merchandise within the discount period, the journal entry that Amy will make to record the collection of cash would include a

A) Debit to Sales Discounts of $160
B) Credit to Sales Discounts of $160
C) Credit to Cash of $7,840
D) Debit to Cash of $8,000

Question 30

Goofy Golf, sells high-quality golf clubs. On May 9, Goofy Golf sold five sets of golf clubs at a price of $500 each. Each set was sold for $100 cash and the rest on credit. On June 9, Goofy Golf collected the rest of the cash on the sale. The journal entry to record the collection of cash on June 9 is

A)
$\begin{array} { c c } \text { Accounts Receivable } & 2,000 \\\text { Sales Revenue } & 2,000\end{array}$
B)
$\begin{array}{lll}\text { Cash } & 2,000 & \\\text { Sales Revenue } & & 2,000\end{array}$
C)
$\begin{array}{l}\text { Cash } \quad 2,000 \\\text { Accounts Receivable } \quad 2,000 \\\end{array}$
D)
$\begin{array} { l r } \text { Accounts Receivable } & 2,000 \\\text { Cash } & 2,000\end{array}$

Question 31

When the direct write-off method of recognizing bad debt expense is used, which of the following accounts would NOT be used?

A) Bad debt expense
B) Accounts receivable
C) Allowance for bad debts
D) All of these accounts are used in the direct write-off method

Question 32

Raven Company had the following account balances Sales Revenue, $100,000; Sales Returns and Allowances, $2,400; Sales Discounts, 2,400; and Bad Debts, $400. Given these balances, the amount of net sales is

A) $100,000
B) $98,000
C) $95,600
D) $95,200

Question 33

The direct write-off method

A) Results in a better matching of costs with revenues than the allowance method
B) Is more precise than the allowance method
C) Is the only acceptable method allowed under generally accepted accounting principles
D) Is used only by large companies

Question 34

Which of the following is NOT a cash control procedure?

A) Separate the handling and recording of cash
B) Deposit all cash receipts daily
C) Make all cash disbursements by check
D) Invest excess cash in high-yielding securities

Question 35

Charles Company sells foods wholesale. On May 15, Charles sold 400 cases of beans to Robin Company for $8 per case with terms of 2/10, n/30. On May 25, Swoops Company paid Edwards the full amount due. Given these data, the entry to record the collection of cash on May 25 would include a

A) Credit to Sales Discounts of $64
B) Debit to Cash of $3,200
C) Credit to Accounts Receivable of $3,200
D) Credit to Cash of $3,136

Question 36

For the month of December, the records of Scrooge Corporation show the following information: The corporation uses the direct write-off method in accounting for uncollectible accounts receivable. What are the gross sales for the month of December?

A) $59,000
B) $60,000
C) $61,000
D) $72,000

Question 37

The difference between gross sales and net sales is

A) Cost of goods sold
B) Selling and administrative expenses
C) Sales discounts and sales returns and allowances
D) Gross margin

Question 38

Customers who do NOT pay for the merchandise that they bought on credit are referred to as

A) Delinquent accounts
B) Bad debts
C) Unpaid transactions
D) Lost sales revenue

Question 39

Bad Debt Expense is classified as a(n)

A) Cost of sales expense
B) Administrative expense
C) Other expense
D) Selling expense

Question 40

When the allowance method of recognizing bad debt expense is used, the entry to record the write-off of a specific uncollectible account would decrease

A) Allowance for Bad Debts
B) Net income
C) Net realizable value of accounts receivable
D) Working capital

Question 41

Samson Corporation had sales of $1,000,000 during 2012, of which 80 percent were on credit. On December 31, 2012, Accounts Receivable totaled $80,000 and Allowance for Bad Debts had a credit balance of $1,200. Given the preceding information, if uncollectible receivables are estimated to be 1/2 of 1 percent of credit sales, the adjusting entry to account for uncollectible receivables as of December 31, 2012, would include a

A) Debit to Allowance for Bad Debt Expense of $4,000
B) Debit to Bad Debt Expense of $2,800
C) Credit to Bad Debt Expense of $2,800
D) Credit to Allowance for Bad Debts of $4,000

Question 42

When the allowance method of recognizing bad debt expense is used, the entries at the time of collection of a small account previously written off would

A) Increase net income
B) Increase Allowance for Bad Debts
C) Decrease net income
D) Decrease Allowance for Bad Debts

Question 43

Using the allowance method, the journal entry required to adjust the accounting records when an amount is collected that had previously been written off as uncollectible would probably include a credit to

A) Notes Receivable
B) Bad Debt Expense
C) Allowance for Bad Debts
D) Cash

Question 44

Samson Corporation had sales of $1,000,000 during 2012, of which 60 percent were on credit. On December 31, 2012, Accounts Receivable totaled $80,000, and Allowance for Bad Debts had a credit balance of $1,200. Given this information, if uncollectible receivables are estimated to be 3 percent of accounts receivable, the adjusting entry as of December 31, 2012, to account for bad debts would include a

A) Debit to Bad Debt Expense of $2,400
B) Debit to Bad Debt Expense of $3,600
C) Credit to Bad Debt Expense of $1,200
D) Credit to Allowance for Bad Debts of $1,200

Question 45

JR Corporation has a debit balance of $3,750 in Allowance for Bad Debts. If it estimates that 2 percent of the net sales of $1,500,000 will be uncollectible, it should debit

A) Allowance for Bad Debts for $30,000
B) Allowance for Bad Debts for $33,750
C) Bad Debt Expense for $33,750
D) Bad Debt Expense for $30,000

Question 46

Allowance for Bad Debts is an example of a(n)

A) Expense account
B) Contra account
C) Adjunct account
D) Control account

Question 47

Following are the account balances from the December 31 trial balance of Lark Company: $\begin{array}{lc}\text { Accounts Receivable } & \$ 60,000 \\\text { Allowance for Bad Debts } & 2,400 &(dr)\\\text { Sales Revenue } & 405,000 \\\text { Sales Retums and Allowances } & 15,000\end{array}$ If 1 percent of the net sales is estimated to be uncollectible, the entry to record the estimate of bad debts would include a debit to Bad Debt Expense for

A) $3,900
B) $1,500
C) $4,050
D) $6,300

Question 48

The December 31 trial balance of Humming Company included the following accounts: If it is estimated that 1 percent of the net sales is uncollectible, the entry to record the estimate of bad debts would include a debit to Bad Debt Expense for

A) $2,000
B) $1,130
C) $3,250
D) $3,130

Question 49

A method of estimating bad debts that focuses on the balance sheet rather than the income statement is the allowance method based on

A) Direct write-off
B) Aging the accounts receivable
C) Credit sales
D) Specific accounts determined to be uncollectible

Question 50

Following are the account balances from the December 31 trial balance of Lark Company: If 10 percent of the Accounts Receivable is estimated to be uncollectible, the entry to record the estimate of bad debts would include a debit to Bad Debt Expense for

A) $6,000
B) $5,760
C) $6,240
D) $3,600

Question 51

When the allowance method is used to account for uncollectible accounts, the net amount of accounts receivable

A) Increases when an account is written off as uncollectible
B) Decreases when an account is written off as uncollectible
C) Stays the same when an account is written off as uncollectible
D) Is sometimes increased and sometimes decreased when an account is written off as uncollectible

Question 52

Following are the account balances from the December 31 trial balance of Lark Company: If 10 percent of the Accounts Receivable is estimated to be uncollectible, the entry to record the estimate of bad debts would include a debit to Bad Debt Expense for

A) $6,000
B) $6,240
C) $8,400
D) $3,600

Question 53

Deuce Company uses the allowance method to estimate losses from uncollectible receivables. Net sales for the year are $120,000, and the company estimates its bad debts as 1 percent of net sales. If there is already a $1,200 debit balance in Allowance for Bad Debts, how much should be recorded as Bad Debt Expense?

A) $1,200
B) $2,400
C) $24,000
D) No entry is required

Question 54

Samson Corporation had sales of $1,000,000 during 2012, of which 60 percent were on credit. On December 31, 2012, Accounts Receivable totaled $80,000, and Allowance for Bad Debts had a credit balance of $1,200. Given this information, if uncollectible receivables are estimated to be 1/2 of 1 percent of credit sales, the adjusting entry to account for uncollectible receivables as of December 31, 2012, would include a

A) Debit to Bad Debt Expense of $3,000
B) Debit to Bad Debt Expense of $1,800
C) Credit to Bad Debt Expense of $3,000
D) Credit to Allowance for Bad Debts of $5,000

Question 55

You have just analyzed customers' accounts receivable through an "aging" process and have determined that $3,000 of the accounts receivable are probably uncollectible. Noting that your trial balance shows an Allowance for Bad Debts with a debit balance of $100, what is the correct adjusting entry?

A)
$\begin{array}{ll}\text { Bad Debt Expense } & 3,100 \\\text { Allowance for Bad Debts } & 3,100\end{array}$

B)
$\begin{array}{cc}\text { Allowance for Bad Debts } & 3,100 \\\text { Bad Debt Expense } & 3,100\end{array}$
C)
$\begin{array}{cc}\text { Allowance for Bad Debts } & 3,000 \\\text { Bad Debt Expense } & 3,000\end{array}$
D)
$\begin{array}{ll}\text { Bad Debt Expense } & 2,900 \\\text { Allowance for Bad Debts } & 2,900\end{array}$

Question 56

The existing balance in Allowance for Bad Debts is ignored when which estimation method is used?

A) Percentage of receivables method
B) Percentage of sales method
C) Aging method
D) All of these estimations

Question 57

The journal entry would be made when

A) A customer pays the account balance
B) A customer defaults on the account
C) A previously defaulted customer pays the outstanding balance
D) Estimated uncollectible receivables are too low

Question 58

When a specific customer's account is written off by a company using the allowance method, the effect on net income and the net realizable value of the accounts receivable is Net Income Net Realizable Value of Accounts Receivable

A) None None
B) Decrease Decrease
C) Increase Increase
D) Decrease None

Question 59

Based on the aging of its accounts receivable at December 31, Charman Company determined that the net realizable value of the receivables at that date is $304,000. Additional information is as follows: Charman's Bad Debt Expense for the year ended December 31 is

A) $32,000
B) $38,400
C) $48,000
D) $64,000

Question 60

The two methods of accounting for bad debts are the direct write-off method and the allowance method. When comparing the two, which of the following is true?

A) The direct write-off method is exact and also better illustrates the matching principle
B) The allowance method is less exact but it better illustrates the matching principle
C) The direct write-off method is theoretically superior
D) The direct write-off method requires two separate entries to write off an uncollectible account

Question 61

Based on the aging of its accounts receivable at December 31, Dudikoff Company determined that the net realizable value of the receivables at that date is $760,000. Additional information is as follows: Dudikoff's Bad Debt Expense for the year ended December 31 is

A) $28,000
B) $80,000
C) $92,000
D) $148,000

Question 62

Exhibit 6-1 Dana Company's December 31, 2012, financial statements showed the following:
Refer to Exhibit 6-1. Given the information above, Dana Company's accounts receivable turnover ratio for 2012 was

A) 8.0
B) 6.0
C) 4.4
D) 7.1

Question 63

Which of the following factors are used to compute the average collection period of accounts receivable?

A) Inventory turnover and 365 days
B) Net sales and average inventory
C) Accounts receivable turnover and 365 days
D) Average accounts receivable and cost of goods sold

Question 64

The following information is available for Bridges Company: The accounts receivable turnover for 2013 is computed as follows:

A) $2,500,000 ¸ $462,500
B) $3,000,000 ¸ $462,500
C) $2,500,000 ¸ $475,000
D) $3,000,000 ¸ $485,000

Question 65

The ratio that is an attempt to determine how many times, in a year, a company collects its receivables is the

A) Average collection period
B) Accounts receivable turnover
C) Inventory turnover
D) Accounts receivable collected

Question 66

Ward Company uses the allowance method of accounting for bad debts. The following summary schedule was prepared from an aging of accounts receivable outstanding on December 31 of the current year. The following additional information is available for the current year:
If Ward bases its estimate of bad debts on the aging of accounts receivable, Bad Debt Expense for the current year ending December 31 is

A) $47,000
B) $48,000
C) $50,000
D) $52,000

Question 67

Exhibit 6-1 Dana Company's December 31, 2012, financial statements showed the following:
Refer to Exhibit 6-1. Given the information above, Dana Company's average collection period (rounded) for 2012 was

A) 52 days
B) 46 days
C) 83 days
D) 61 days

Question 68

In calculating a company's accounts receivable turnover ratio, which of the following sets of factors would be used?

A) Net income and average accounts receivable
B) Total assets and average accounts receivable
C) Total accounts receivable and sales revenue
D) Sales revenue and average accounts receivable

Question 69

Exhibit 6-2 On December 31, 2012, Seau Inc.'s financial statements showed the following:
Refer to Exhibit 6-2. Given the information above and assuming a 365-day business year, what was Seau's average collection period (rounded) during 2012?

A) 56 days
B) 53 days
C) 49 days
D) 41 days

Question 70

The ratio that shows how long it takes for a company to collect its receivables is the

A) Average collection period
B) Accounts receivable turnover
C) Number of days in receivables
D) Accounts receivable collected

Question 71

The entry to record actual expenses incurred to perform service under warranty would include a

A) Debit to Customer Service Expense
B) Credit to Customer Service Expense
C) Debit to Estimated Liability for Service
D) Credit to Estimated Liability for Service

Question 72

Exhibit 6-2 On December 31, 2012, Seau Inc.'s financial statements showed the following:
Refer to Exhibit 6-2. Given the information above and assuming a 365-day business year, what was Seau's accounts receivable turnover during 2012?

A) 8.9
B) 12.5
C) 7.5
D) 6.3

Question 73

If a company's accounts receivable turnover ratio is 8.0 times, cost of goods sold is $360,000, and sales revenue is $480,000, the average accounts receivable balance must have been

A) $60,000
B) $80,000
C) $120,000
D) $160,000

Question 74

Gordie Co. reported an Allowance for Bad Debts of $20,000 (credit) at December 31, before performing an aging of accounts receivable. As a result of the aging, Gordie determined that an estimated $28,000 of the December 31, accounts receivable would prove uncollectible. The adjusting entry required at December 31, would be

A)
$\begin{array} { l l } \text { Bad Debt Expense } & 28,000 \\\text { Allowance for Bad Debts } & 28,000\end{array}$
B)
$\begin{array}{lr}\text { Bad Debt Expense } & 20,000 \\\text { Accounts Receivable } & 20,000\end{array}$
C)
Allowance for Bad Debts $\quad 8,000$
Bad Debt Expense $\quad 8,000$
D)
$\begin{array} { l r } \text { Bad Debt Expense } & 8,000 \\\text { Allowance for Bad Debts } & 8,000\end{array}$

Question 75

The entry to record estimated service expenses related to sales would include a

A) Credit to Sales Revenue
B) Debit to Sales Revenue
C) Debit to Estimated Liability for Service
D) Credit to Estimated Liability for Service

Question 76

Estimated warranty costs associated with sales should be expensed to properly

A) Recognize revenue
B) Follow the historical cost concept
C) Match revenues and expenses
D) Satisfy SEC requirements

Question 77

Which of the following demonstrates that a company is managing its receivables well?

A) The company is cash poor.
B) The company has many short term loans with high interest.
C) The company has cash to pay its bills.
D) The company is losing interest that could be earned by investing.

Question 78

Penn Inc. reported an allowance for bad debts of $30,000 (debit) at December 31, before performing an aging of accounts receivable. As a result of the aging, Penn Inc. determined that an estimated $52,000 of the December 31, accounts receivable would prove uncollectible. The adjusting entry required at December 31, would be

A)
$\begin{array}{lr}\text { Bad Debt Expense } & 52,000 \\\text { Allowance for Bad Debts } & 52,000\end{array}$
B)
$\begin{array}{cr}\text { Allowance for Bad Debts } & 52,000 \\\text { Accounts Receivable } & 52,000\end{array}$
C)
Bad Debt Expense $\quad 82,000$
Allowance for Bad Debts $\quad 82,000$
D)
$\begin{array}{lr}\text { Allowance for Bad Debts } & 82,000 \\\text { Bad Debt Expense } & 82,000\end{array}$

Question 79

Samson Corporation had sales of $1,000,000 during 2012, of which 80 percent were on credit. On December 31, 2012, Accounts Receivable totaled $80,000 and Allowance for Bad Debts had a debit balance of $1,200. Given this information, if uncollectible receivables are estimated to be 3 percent of accounts receivable, the adjusting entry as of December 31, 2012, to account for bad debts would include a

A) Debit to Bad Debt Expense of $1,200
B) Debit to Bad Debt Expense of $2,400
C) Debit to Bad Debt Expense of $3,600
D) Credit to Allowance for Bad Debts of $2,400

Question 80

An analysis and aging of the accounts receivable of Kaiten Company at December 31 revealed the following data: The net realizable value of the accounts receivable at December 31 should be

A) $475,000
B) $443,000
C) $450,000
D) $443,000.