On the balance sheet under current assets there is an amount called Accounts receivables less allowances.
Does it mean its already the net accounts receivable?
or do i have to subtract it to get the net?
To determine the net accounts receivable, you need to subtract the allowances from the accounts receivable listed on the balance sheet under current assets.
Accounts receivable refers to the total amount of money that a company is owed by its customers for goods or services provided on credit. It represents the short-term receivables that the company expects to receive within one year.
Allowances, on the other hand, represent estimated reductions in the accounts receivable balance to account for potential uncollectible amounts or discounts given to customers. Allowances are made based on historical data, industry norms, and management's judgment.
So, if the balance sheet lists "Accounts receivables less allowances" under current assets, it means that the amount provided is already the net accounts receivable. The allowances have already been deducted, giving you the net figure.
You do not need to subtract any further to get the net accounts receivable as it has already been adjusted for potential uncollectible amounts or discounts.