Nontrade Receivables, Such as Deposits with Utility Companies or Advances

question 80

Multiple Choice

Nontrade receivables, such as deposits with utility companies or advances to subsidiary companies, should be

• A)recorded in separate accounts and reported as noncurrent assets on the balance sheet
• B)recorded along with trade receivables in one account and included as part of the total receivables balance on the balance sheet
• C)recorded in separate accounts and separately reported on the balance sheet
• D)recorded in separate accounts and reported as an offset to retained earnings on the balance sheet

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Definitions:

Period Costs

Costs that are expensed in the period in which they are incurred, rather than being capitalized or included in the cost of goods sold.

Raw Materials Inventory

The goods and materials that a company holds that are intended for use in the production process.

Raw Materials Purchased

The total cost of raw materials bought by a company for use in production during a specific time period.

Job Order Cost Sheet

A record maintained for each job in a job order costing system, detailing the materials, labor, and overhead costs incurred.