Question

The company determines that all the money on its receivables are usually not collected. Suppose it determines based on past experience that $1,600 of its accounts receivable are unlikely to be collected.

Answer 1

The subject of this question is Business, and it is about a company determining that some of its accounts receivable are unlikely to be collected.

Step-by-step explanation:

The subject of this question is Business and it is suitable for High School level.

When a company determines that all the money on its receivables are unlikely to be collected, it means that some customers owe the company money but are unlikely to pay it back. In this case, based on past experience, the company has determined that $1,600 of its accounts receivable are unlikely to be collected.

This is an example of how a company accounts for the risk of default by customers and factors it into its financial planning.