Receivables are: Answer a. One of the most liquid assets and thus are always con
ID: 2442678 • Letter: R
Question
Receivables are:Answer
a. One of the most liquid assets and thus are always considered current assets.
b. Claims that are expected to be collected in cash.
c. Shown on the Income Statement at cash realizable value.
d. Always the result of revenue recognition.
The matching principle:
Answer
a. requires that all credit losses be recorded when an individual customer cannot pay.
b. necessitates the recording of an estimated amount for bad debts.
c. results in the recording of a known amount for bad debt losses.
d. is not involved in the decision of when to expense a credit loss.
Explanation / Answer
receiveble are option "b" . Claims that are expected to be collected in cash" remainig all are not correct ..the reason why. option "a" it is not liquid asset ,because it can be further classify into long term or short term current or non current assets.As we know most liquid means acid nature.that is [current assets -inventory] c.obiously wrong d.its not a revenue recognisgation.bcause its not yet recognised as revenue..thus it would shown unde balncesheet.. for matching concept : Mtching revenue agains its expense.... option "c" is the correct answer.. bad debts (cr) customers a.out of that nothing is coming as a revenue.. b.its accrual concept d.wrong.Related Questions
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