The Interest Element for Trade Receivables

question 45

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.
• C) is included in the net realizable value of the receivables.
• D) becomes more significant as the time between the sale and payment shortens.

---

Definitions:

Factory Overhead Cost Variance Report

Reports budgeted and actual costs for variable and fixed factory overhead along with the related controllable and volume variances.

Standard Factory Overhead Cost

The predetermined estimate of indirect manufacturing costs that are expected to be incurred during a period.

Presentation Means

The methods or techniques used to display or convey information, ideas, or data to an audience.

Finished Goods Account

An account representing the total cost of manufactured goods that are completed and ready for sale.