What value will the accounts receivable

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A Business has plenty of customers, who are given a month duration to pay for their work. by 31st of July 2020, the business has $1,200,000 in accounts receivable. The business anticipates that 10% of their customers will default and not pay at all.

What value will the accounts receivable (debtors) be recorded for in the balance sheet on 31st July and why?

From my understanding, the value that will be recorded in the balance sheet on the 31st of July will be $1,200,000. It's because we do not know how many customers the business has so it's better to recorded and estimate how many customers out of for example 100 customers will not pay the full amount they owe. Is my understanding correct or is my understanding of the question and account receivable wrong?

Reference no: EM132945053

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