The Collection Period of Accounts Receivable Is Usually Long,and Therefore,it

question 213

True/False

The collection period of accounts receivable is usually long,and therefore,it is classified as a long-term asset on the balance sheet.

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Definitions:

Cash Shortages

Instances when the actual cash available is less than the amount expected or needed.

Cash Overages

Excess of actual cash received over the expected amount, often caused by either errors in transactions or more sales than recorded.

Cash Discounts

Incentives offered by sellers to encourage buyers to pay their bills quickly, usually expressed as a percentage of the invoice amount if paid within a specific period.

Internal Controls

Processes put in place by management to ensure reliability of financial reporting, effective and efficient operations, and compliance with laws and regulations.