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

question 66

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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