Receivables are valued based on their ________.
A) fair value
B) estimated amount collectible
C) lower-of-cost-or-market value
D) historical cost

Question

Quizplus · Accepted Answer

Receivables are valued based on their estimated amount collectible, which considers the likelihood and timing of future cash receipts. Fair value is not necessarily applicable for receivables, as they do not have readily available market prices. Lower-of-cost-or-market value may be used for inventory but not usually for receivables. Historical cost is the original cost of the receivable and does not reflect any changes in value or collectability over time.

Receivables Are Valued Based on Their ________