Accounts receivable shall be measured initially at its transaction priceGroup of answer choicesTrueFalse
Question
Accounts receivable shall be measured initially at its transaction price.
Group of answer choices
- True
- False
Solution
Answer
The statement is True.
Accounts receivable should be measured initially at its transaction price, which is the amount that the entity expects to receive for the goods or services provided. This principle is in accordance with the recognition criteria set by the relevant accounting standards, such as IFRS 15 (Revenue from Contracts with Customers) and ASC 606 in the US GAAP. Measuring accounts receivable at the transaction price helps ensure that financial statements accurately reflect the economic reality of the entity's transactions, clarifying the realizable value of the receivables on the balance sheet.
Similar Questions
Notes receivable are recognized in the accounts atGroup of answer choicescash (net) realizable valueface value.gross realizable valuematurity value
Accounts receivable is classified as a non-current asset.Group of answer choicesTrueFalse
Accounts receivable is increased by:Select one:a.Debiting the accountb.Crediting the accountc.Not doing anythingd.Debiting or crediting any other account
Only real accounts are extended to the statement of financial position Group of answer choicesTrueFalseNext
Under the _____ accounting system, transactions are recorded when they occur.Group of answer choicescash-basedthroughputmanagerialaccrual
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.