The Interest Element for Trade Receivables

question 35

Multiple Choice

The interest element for trade receivables

• A)is usually not recognized because of materiality considerations
• B)must always be recognized and be accounted for using the net method.
• C)is recognized at their net realizable value.
• D)becomes more significant as the time between the sale and payment shortens.

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Definitions:

Government Provision

The action of supplying or making available goods, services, or resources by a government to its citizens.

Economic Goods

Items or services that have monetary value and are scarce in relation to their demand, thus requiring sacrifice to obtain them.

Protective Function

A role often played by governmental bodies to ensure the safety and security of its citizens, through measures like law enforcement and military defense.

Legal Enforcement

The process of ensuring compliance with laws, regulations, and rules through sanctions or penalties.