Accounts Receivable Are Valued and Reported on the Balance Sheet

question 46

Multiple Choice

Accounts receivable are valued and reported on the balance sheet

• A)in the investments section.
• B)at gross amounts less sales returns and allowances.
• C)at cash realizable value.
• D)only if they are not past due.

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Definitions:

Compensating Balance

A minimum account balance that a company must maintain as part of an agreement with a lender, often to secure a loan or line of credit.

Cash Balance

The amount of money on hand and available in a company's bank accounts at any given time.

EFT

Electronic Funds Transfer, a system that moves money between accounts electronically.

Bank Reconciliation Process

The act of matching the balances in a company's financial records for a cash account to the corresponding information on a bank statement.