NOTES RECEIVABLES (Q3)

Question 1

CRITERIA NR

Answer 1

-ITS WRITTEN PROMISE NOTE
-BEAR INTEREST
-HAS MATURITY DUE DATE AT SPECIFIC PERIOD
-IT NEGOTIABLE INSTRUMENT

Question 2

FACTOR EFFECT

Answer 2

-INDUSTRY
-LEVEL OF SALES
-NATURE OF BUSINESS
-CREDIT POLICY

Question 3

BENEFITS

Answer 3

-INCREASE IN SALES
-MEET THE COMPETITION
-BETTER CUSTOMER LOYALTY

Question 4

COST/FACTOR OFFERING CREDIT

Answer 4

-ADDITIONAL ADMINISTRATIVE COST
-LOSS OF OPPURTUNITY AS CASH IS TIED UP W DEBTORS
-KEEPING UP WITH ACC RECEIVABLE
-POTENTIAL TO BAD DEBTS
-LATE PAYMENT RESULT IN REDUCE CASH FLOW

Question 5

BENEFIT AGING REPORT

Answer 5

-DETERMINE THE FINANCIAL HEALTH AND STABILIZE
-DETERMINE CUST CREDIT RISK
-ABILITY AND EFFICIENCY OF THE CO. IN COLLECTING THEIR DEBTS
-REPORT SHOWS A PARTICULAR RECEIVABLES BEING COLLECTED MUCH SLOWER

Question 6

AVOID BAD PAYMENT

Answer 6

-SETTING CREDIT LIMIT
(MAX AMOUNT THAT ENTITY WILLING TO RISK)\

-CREDIT MONITORING THROUGH PREPARING AGING REPORT
(HELP IDENTIFY CUST THAT FALLING BEHIND ON THEIR PAYMENT)

Question 7

DERECOGNITION OF TRADE PAYABLES

Answer 7

(WAJIB TULIS FACTS)
MFRS 9 PRESCRIBES THAT “AN ENTITY SHALL DERECOGNISE FINANCIAL ASSET OF A PORTION OF A FINANCIAL ASSET WHEN AND ONLY WHEN THE CONTRACTUAL RIGHTS TO THE CASH FLOWS FROM THE FINANCIAL ASSEET EXPIRE”

thus, (the co name) should NOT derecognise from its books because has not fully paid the amount due as at 31 dec 202x as the contractual right to the cash flow of rmx (balance left) from the co has not expire.

thus, (the co name) SHOULD derecognise from its books as the contractual right to the cash flow of rmx from the co. expired when the co paid the amount due on (date).

Question 8

TYPES RECEIVABLES

Answer 8

ACC RECEIVABLES
( Amounts owed by customers that result
from the sale of goods and services)

NOTES RECEIVABLES
(Claims for which a written promise of credit are issued as proof of debt)

Question 9

GIVEN RISE OR NOT
-(the receivables) has created contractual rights for (the company) to receive cash or other financial assets from (receivables)

Answer 9

The transaction on 1 June 2022 between Treasure Bhd (company) and Earth Bhd (receivables) give rise to financial
asset.
The delivery of goods on 1 June 2022 to Earth Bhd has created contractual rights
for Treasure Bhd  to receive cash or other financial assets from Earth Bhd  (promise to
pay in 120 days).