Final answer:
Accounts receivable are reported on the balance sheet at the net realizable value, which is the estimated cash amount expected to be received, less any allowance for doubtful accounts.
Step-by-step explanation:
Reporting of Accounts Receivable on the Balance Sheet
Accounts receivable are reported on the balance sheet at the net realizable value. This is the amount that a business can reasonably expect to collect from its debtors, net of any provision for doubtful accounts (an allowance for accounts that may not be collectible). The net realizable value is an assessment of the actual cash value that will be received, as opposed to presenting these receivables at their present value, accumulated market value, or maturity value.
Understanding the Net Realizable Value
The net realizable value is determined by taking into account the total amount of accounts receivable and subtracting any allowance for doubtful accounts. This calculation ensures that the accounts receivable are not overstated and reflects a more accurate representation of the asset's value on the balance sheet.