The interest element for trade receivables
A)is usually not recognized because of materiality considerations.
B)must always be recognized and be accounted for using the net method.
C)is included in the net realizable value of the receivables.
D)becomes more significant as the time between the sale and payment shortens.
Cash and Receivables 7 - 11

Question

Quizplus · Accepted Answer

Interest on trade receivables is often not recognized due to materiality considerations, as the amounts involved are typically small and do not significantly impact financial statements.

The Interest Element for Trade Receivables