Question

Camila manages a used car dealership that allows customers to buy cars for no money down and pay in installments throughout the year. Her company builds in a bad-debts adjustment that is deducted from the accounts receivable balance to present a more realistic view of the payments likely to be received in the future for these cars. The payments the company expects to receive are called:

Answer 1

NET RECEIVABLES

Step-by-step explanation:

Net receivables refers to the net amount of money remaining after deducting the provision for bad debt. It is primarily used in business that sell on credit.

Companies often sell goods and services on credit, allowing customers to repay on a later date. When the payment date becomes due, some buyers find themselves unable to pay so the company selling estimates the percentage of customers not able to pay, the company then takes a charge against receivables, writing off uncollected funds as bad debt expense or uncollectible account expense. What is left after deducting for bad debt is called NET RECEIVABLES.

Therefore, the payments the company expects to receive is NET RECEIVABLES.