Short-term notes receivable are reported at Group of answer choicescash (net) realizable value.face valuegross realizable value.maturity value
Question
Short-term notes receivable are reported at
Group of answer choices
- cash (net) realizable value.
- face value
- gross realizable value.
- maturity value
Solution
To determine how short-term notes receivable are reported, we need to understand the different terms provided in the answer choices:
-
Cash (net) realizable value: This is the amount of cash that is expected to be received from the notes receivable, after accounting for any potential uncollectible amounts.
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Face value: This is the principal amount of the note, which is the amount stated on the note itself without any adjustments.
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Gross realizable value: This term is not commonly used in accounting, but it could imply the total amount expected to be received before any deductions.
-
Maturity value: This is the total amount that will be received at the maturity date of the note, including both the principal and any interest.
Short-term notes receivable are typically reported at their cash (net) realizable value. This is because it reflects the actual amount of cash that the company expects to collect, which provides a more accurate representation of the asset's value on the balance sheet.
Therefore, the correct answer is cash (net) realizable value.
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