Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Net Accounts Receivable: Allowance for Doubtful Accounts

Financial Accounting

7. Receivables and Investments

Net Accounts Receivable: Allowance for Doubtful Accounts

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Multiple Choice

The original cost of an asset minus accumulated depreciation is known as:

Market value

Allowance for doubtful accounts

Net accounts receivable

Book value

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Verified step by step guidance

Understand the concept of 'Book Value': In financial accounting, the book value of an asset is calculated as the original cost of the asset minus the accumulated depreciation. It represents the value of the asset as recorded in the company's books.

Identify the components: The original cost refers to the purchase price or acquisition cost of the asset, while accumulated depreciation is the total amount of depreciation that has been charged against the asset over time.

Relate the formula: The formula for book value can be expressed as:

Book Value = Original Cost - Accumulated Depreciation

Differentiate from other terms: Market value refers to the current selling price of the asset in the market, allowance for doubtful accounts is a contra-asset account related to receivables, and net accounts receivable is the total receivables minus the allowance for doubtful accounts.

Apply the concept: When solving problems related to book value, always subtract the accumulated depreciation from the original cost of the asset to determine its book value.