Net sales is calculated as sales on credit - sales returns - sales allowances. Net receivables are the total money owed to a company by its customers minus the money owed that will likely never be paid. The reason net credit sales are used instead of net sales is that cash sales dont create receivables.
NRV 5000 800 200 4000.
Net realizable value or NRV is the amount of cash a company expects to receive based on the eventual sale or disposal of an item after deducting any associated costs. In the case of accounts receivable net realizable value can also be expressed as the debit balance in the asset account Accounts Receivable minus the credit balance in the contra asset account Allowance for Uncollectible Accounts. The formula is AR allowance net receivables. Understanding the Matching Principle.