Answered: short-term receivables in the balance…

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

Assuming that the ideal measure of short-term receivables in the balance sheet is the discounted value of cash to be received in the future, failure to follow this practice usually does not make the balance sheet misleading because

a. The amount of the discount is not material.

B. Most receivables can be sold to a bank or factor.

C. Most short-term receivables are noninterest bearing.

D. The allowance for uncollectible accounts includes a discount element.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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