When classifying assets on the balance sheet:
A) accounts receivable are reported at their net amount.
B) accounts receivable are amounts a company expects to collect from a party who has signed a promissory note to the company.
C) prepaid expenses are considered long-term assets.
D) money-market accounts are prepaid expenses.

Question

Quizplus · Accepted Answer

Accounts receivable are reported on the balance sheet at their net realizable value, which is the amount the company expects to collect after deducting any allowances for doubtful accounts or bad debts.

Answer: None of the above options B, C, or D are correct. 
 Accounts receivable are amounts owed to a company by customers or clients for goods or services already provided, with payment expected in the near future. Prepaid expenses are amounts paid in advance for goods or services that will be used up or consumed in the future, such as insurance premiums or rent. Money-market accounts are a type of cash equivalent asset, not a prepaid expense.

When Classifying Assets on the Balance Sheet