chap 4' accounts receivable Flashcards
it refers to claims arising from sale of merchandise or services in the ordinary course business. it also includes accounts receivable and notes receivable.
trade receivables
are open accounts arising from the sale of goods and services in the ordinary course of business and not supported by promissory notes.
accounts receivable
true or false: other names of accounts receivable are customer’s accounts, trade debtors, and trade accounts receivable.
true
it represents claims arising from sourcez other than sale of merchandise or services in the ordinary course of business.
nontrade receivables
trade receivables which are expected to be realized in cash within the normal operating cycle or one year, whichever is longer, are classied as _?
current assets
non-trade receivables which are expected to be realized in cash within one year, the length of the operating cycle notwithstanding l, are classifed as _?
current assets
if collectible beyond one year, nontrade receivables are classified as _?
noncurrent assets
“an entity shall classify an asset as current when the entity expects to realize the asset or intends to sell or consume it in the entity’s normal operating cycle, or when the entity expects to realize the asset within twelve months after the reporting period.“
pas 1, presentation of financial statements, paragraph 66
trade receivables and nontrade receivables which are currently collectible shall be presented on the face of the statement of financial position as one line item called _?
trade and other receivables
advances to affiliates are _ assets.
noncurrent assets
advances to supplier are _ assets.
current assets
it should be shown preferably as a deduction from subscribed share capital unless collectible currently.
subscriptions receivable. contra-equity
creditors’ accounts with debit balances as a result of overpayment or returns and allowances are classified as _ assets.
current assets
special deposits in contract bids normally are classified as _ assets because such deposits are likely to remain outstanding for a considerable long period of time.
noncurrent asset
dividend receivable, accrued rent receivable, accrued royalties receivable and accrued interest receivable are usually classifed as _ assets.
current assets
claims receivable such as claims against common carriers for losses or damages, claim for rebates and tax refunds are normally classified as _ assets.
current assets
are credit balances in accounts receivable resulting from overpayments, returns, and allowances, and advance payments from customers.
customers’ credit balances
they are classified as current liabilities and are not offset against debit balances in other customer’s accounts, except when the same is not material in which case only the net accounrs receivable may be presented.
customers’ credit balances
true or false: no adjustment is necessary to formally recognize the customers’ credit balancez because ultimately the credit balances are canceled for sales and cash settlement. but an adjustment may be made only for worksheet purposes, meaning, not formally journalizedand posted to the ledger.
true
pfrs _, paragraph 5.1.1, provides that accounts receivable shall be recognized initially at face amount or original invoice amount plus transaction costs that are directly attributable to the acquisition.
pfrs 9, paragraph 5.1.1
true or false: cash flows relating to short-term accounts receivable are not discounted because the effect of discounting is usually immaterial.
true
true or false: with respect to accounts receivable, transaction costs are not normally incurred because the accounts simply arise from the act of selling goods in the ordinary course of business.
true