Receivables are normally reported on the balance sheet at net realizable value. In contrast, payables are carried at face value. Which accounting principle requires this treatment of payables?
A)Materiality concept.
B)Going concern assumption.
C)Monetary unit assumption.
D)Matching concept.

Question

Quizplus · Accepted Answer

The assumptions that companies are going concerns, or will continue to operate. dictates that notes payable be reported at their face value, as companies are expected to pay their obligations in full. In contrast, a certain amount of receivables are not expected to be collected, so receivables are reported at their net realizable value.

Receivables Are Normally Reported on the Balance Sheet at Net