net vs. gross a/r

student007 · #1 Sep 19, 2006, 09:59 AM

In a company's financial statements, what is usually shown in the a/r account? net or gross a/r? if the a/r is broken down, and a note says the company uses 2.5% allowance for bad accounts based on a/r, but no allowance account is explicitly shown, do you assume that the values you see are net, or gross a/r? Also, if they are net a/r, then would gross a/r be equal to:

net a/r = (net a/r) / 0.0975

Thx

CaptainForest · Sep 19, 2006, 02:09 PM

Balance Sheet

Cash 100
Accounts Receivable 90
Less: AFDA 30
Net AR 60

If it just says AR 60 and you KNOW there is an AFDA, then the 60 is the NET amount.

student007 · Sep 19, 2006, 06:33 PM

Thanks



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