Chapter 10 (Trade Recevables)

Question 1

Define trade receivables

Answer 1

Trade receivables refer to the amounts owed by customers who buy goods and services from businesses on credit

Question 2

Define allowance for impairment of trade receivables

Answer 2

The estimate amount of debts likely to be uncollectible

Question 3

Matching theory

Answer 3

Impairment loss on trade receivables is recorded in the same financial period as credit sales was earned to determine the profit for that period