5. Entity A has an account receivable of P200,000 from Entity B. In addition, Entity A also has an account payable of P160,000 to Entity B. The account receivable is due in 30 days while the account payable is due in 90 days. Entity A intends to settle first the account receivable. If Entity A has a legal right of set- off, how much account receivable will be shown in its statement of financial position? a. 200,000 c. 160,000 b. 40,000 d. a or b

5. Entity A has an account receivable of P200,000 from Entity B. In addition, Entity A also has an account payable of P160,000 to Entity B. The account receivable is due in 30 days while the account payable is due in 90 days. Entity A intends to settle first the account receivable. If Entity A has a legal right of set- off, how much account receivable will be shown in its statement of financial position? a. 200,000 c. 160,000 b. 40,000 d. a or b

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Offsetting
5. Entity A has an account receivable of P200,000 from Entity B.
In addition, Entity A also has an account payable of P160,000
to Entity B. The account receivable is due in 30 days while the
account payable is due in 90 days. Entity A intends to settle
first the account receivable. If Entity A has a legal right of set-
off, how much account receivable will be shown in its
statement of financial position?
c. 160,000
d. a or b
a. 200,000
b. 40,000

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