Non-Trade Receivables Should Be Reported Separately from Trade Receivables

question 191

Multiple Choice

Non-trade receivables should be reported separately from trade receivables.Why is this statement either true or false?

• A)It is true because trade receivables are current assets and non-trade receivables are long term.
• B)It is false because all current receivables must be grouped together in one account.
• C)It is true because non-trade receivables do not result from business operations and should not be included with accounts receivable.
• D)It is false because management can decide how to report receivables.

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Definitions:

Direct Labor

The work performed by individuals directly involved in the manufacturing of goods or provision of services.

Production Costs

The costs incurred by a business in manufacturing a product or providing a service, including materials, labor, and overhead.

Total Cost

The complete cost involved in the production, operation, or activity, including both fixed and variable costs.

Work in Process

Inventory that is in the production process and has not yet been completed or transferred to the finished goods inventory.