Quiz 9: Receivab Es

Business

If at the time of giving a depository account/ loan to a customer the bank informs about the way the interest shall be calculated ( 365/360 method ) then the situation mentioned here shall not be considered unethical. However, if the method of calculation is not specified to customers beforehand, then this shall amount to an unethical practice. A customer can file a suit and recover damages in such a scenario.

The three classifications of receivables are; accounts receivable, notes receivable, and other receivables.

The term receivables includes all money claim against other entities, including people, companies, and other organization. The most common transaction creating a receivable is selling merchandise or services on account. The receivable is recorded as a debit to Accounts Receivable. Such accounts receivable are normally collected within a short period that is 30 days or 60 days. Other receivables include interest receivable, taxes receivable, and receivables from officers and employees. Other receivables are normally reported separately on the balance sheet. Here, both the dues of $2,969 million and $1,241 million shall be classified as notes receivables.

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