Which of the following note shall be discounted to get the initial measurement? A. Interest bearing note due in 3 years B. Note due in 12 months C. Non-interest bearing note due in 3 years D. Note due in 6 months
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
1. Which of the following note shall be discounted to get the initial measurement?
A. Interest bearing note due in 3 years
B. Note due in 12 months
C. Non-interest bearing note due in 3 years
D. Note due in 6 months
2 Which is true concerning the presentation of receivables in the
A. Non-trade receivable is presented as a non-current asset
B. Only trade
C. Trade and Non-trade Receivables are shown separately in line with materiality and aggregation principle
D. Trade and Non-Trade Receivables which are currently collectible shall be presented as one line item called "Trade and Other Trade receivables"
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