Assuming That the Ideal Measure of Short-Term Receivables in the Balance

question 12

Multiple Choice

Assuming that the ideal measure of short-term receivables in the balance sheet is the discounted value of the cash to be received in the future, failure to follow this practice usually does not make the balance sheet misleading because

• A) Most short-term receivables are not interest bearing
• B) The allowance for uncollectible accounts includes a discount element
• C) The amount of the discount is not material
• D) Most receivables can be sold to a bank or factor

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Definitions:

Chamber of Commerce

A local association to promote and protect the interests of the business community in a particular place.

Financial Services

Industries that manage money, including banks, credit unions, credit-card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, and some government-sponsored enterprises.

Networking

The act of connecting with individuals or groups to exchange information and develop professional or social contacts.

Trade Show

An exhibition where companies in a specific industry showcase and demonstrate their new products and services.