Which of the following increases the reported receivables in the financial statements? offsetting a credit balance in an account receivable a credit balance in an account payable adjustment to eliminate a debit balance in accounts payable a credit balance in an allowance account
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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.
- Which of the following increases the reported receivables in the financial statements?
- offsetting a credit balance in an account receivable
- a credit balance in an account payable
- adjustment to eliminate a debit balance in accounts payable
- a credit balance in an allowance account
- Short-term receivables including non-trade receivables that are currently collectible may not be discounted to their present values because
- their face values are normally immaterial.
- they are so near their maturity dates that their values do not change.
- present value computation is very complex.
- the effect of discounting may be immaterial
- Which of the following statements is incorrect concerning the expected credit loss model of PFRS 9?
- The expected credit loss model applies to all financial instruments within the scope of PFRS 9, debt and equity alike.
- A credit loss may be recognized on the initial recognition of a debt instrument.
- The measurement of loss allowance is the same in ‘Stages 2 and 3.’
- Credit losses equal to “12-month expected credit losses” may be recognized on debt instruments acquired that were issued by entities having a high credit rating.
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