1. The problem asks how accounts receivable are reported in the balance sheet. 2. Accounts receivable represent amounts owed to a company by its customers from credit sales. 3. The key accounting principle is to report assets at amounts expected to be collected, reflecting realistic value. 4. The correct method is to report accounts receivable at their **net realizable value**, which is the gross amount minus any allowance for doubtful accounts (expected uncollectible amounts). 5. This ensures the balance sheet shows a realistic estimate of cash expected from receivables. 6. Therefore, the answer is option 3: **at net realizable value**.