Trade and Other Receivables

Question 1

One-line-item account that is used to summarize recceivables that are classified as current assets.

Answer 1

TRADE AND OTHER RECEIVABLES

Question 2

Valuation of Short-Term Receivables

Answer 2

FACE VALUE

Question 3

Valuation of Long-Term Receivables

Answer 3

Discounted amount or Present Value

Amortized cost using effective interest method

Question 4

Arise from the sale of goods or services to customers and in the form of accounts receivable or notes receivables.

Answer 4

TRADE RECEIVABLES

Question 5

Trades receivables are classified as current asset if…

Answer 5

Collectible within one year or normal operating cycle, whichever is longer.

Question 6

…are receivables from all other types of transactions like advances to offciers and employees and advances to other entities.

Answer 6

NON-TRADE RECEIVABLES

Question 7

Non-trade receivables are considered current assets if…

Answer 7

Collectible within one year.

Question 8

Amount to be recorded as accounts receivable from sales on account shall be…

Answer 8

Invoice Price = List Selling Price - Trade Discounts

Question 9

Amount to be recorded as accounts receivable from sales on account shall be…

Answer 9

Invoice Price = List Selling Price - Trade Discounts

Question 10

write-off for accounts receivable under the allowance method is recorded by:

Answer 10

Allowance for doubtful accounts xxx
Accounts Receivable xxx

Question 11

The entry for the write-off must be reversed, and before recording the collection with the ff. entries:

Answer 11

Accounts Receivable xxx
Cash xxx
Accounts Receivable xxx
Allowance for doubtful accounts xxx

or

Cash xxx
Allowance for doubtful accounts xxx

Question 12

Ending balance of accounts receivable shall be presented as part of current assets under the heading of “Trade and Other Receivables” at…

Answer 12

Net Realizable Value or Amortized Cost

Question 13

Net realizable value shall be computed after deducting an allowance for the ff;

Answer 13

Sales Returns
Sales Discounts
Doubtful Accounts

Question 14

Net realizable value shall be computed after deducting an allowance for the ff;

Answer 14

Sales Returns
Sales Discounts
Doubtful Accounts

Question 15

3 Methods in Estimating Doubtful Accounts

Answer 15

• Percentage of Net Credit Sales Method
• Percentage of Accounts Receivable Method
• Aging of Accounts Receivable Method

Question 16

Non-Trade or Other Receivables

Answer 16

Advances, Supplies Debit Balances, Subscription Receivables, Accrued Income, Claims Receivable