The Receivable That Is Usually Evidenced by a Formal Instrument

question 7

Multiple Choice

The receivable that is usually evidenced by a formal instrument of credit is a(n)

• A) trade receivable.
• B) note receivable.
• C) account receivable.
• D) income tax receivable.

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Definitions:

Accrual

A bookkeeping approach that logs income and expenditures at the time they occur, irrespective of the timing of actual cash transactions.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, presenting the financial results and health of the entity.

Onerous Contract

A contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

AASB 137

The Australian Accounting Standards Board standard that deals with the treatment of provisions, contingent liabilities, and contingent assets.