What is net realizable value? How is net realizable value affected when a receivable is written off under the allowance method?
What will be an ideal response
Net realizable value is the net value a company expects to collect from its accounts receivable. Accounts Receivable less Allowance for Bad Debts equals net realizable value. The entry to write off a receivable reduces the amounts of the Allowance for Bad Debts and Accounts Receivable accounts, but does not affect the net realizable value shown on the balance sheet. This is because both accounts are reduced by the amount of the write-off.
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A company is thinking about changing its organizational structure to gain a competitive edge on a consumer trend. This new consumer behavior is very profitable, and the company sees the revenue that can stem from it. However, there is research stating that the trend may not last forever and could be a "fad." Changing the structure to accommodate this new behavior may have which of the following consequences?
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a. Abandoned an approach to doing business rooted in Objectivism and adopted an approach rooted in the Ethic of Care. b. Abandoned an approach to doing business focused exclusively on primary stakeholders and adopted one that takes into account the interests of secondary stakeholders as well. c. Abandoned a culture focused on sustainability in favor of an expansive view of corporate social responsibility. d. Abandoned the company's stakeholder orientation to doing business in favor of a shareholder orientation. e. Abandoned an approach to doing business focused exclusively on the interests of the company's home country in favor of an approach focused on the interests of the broader global community.