Determining that receivables are presented at net realizable value is most directly related to which management assertion?
A)Existence.
B)Rights.
C)Valuation.
D)Presentation and disclosure.

Question

Quizplus · Accepted Answer

The management assertion most directly related to determining that receivables are presented at net realizable value is valuation. This assertion refers to the accuracy and appropriateness of the amounts recorded for assets and liabilities, and requires that the amounts be supported by evidence and reflect the true economic substance of the underlying transactions. In the case of receivables, net realizable value is the estimated amount that the company will ultimately collect from its customers, and it takes into account any allowances for uncollectible accounts. As such, determining that receivables are presented at net realizable value is a key aspect of ensuring the accuracy and appropriateness of the valuation assertion.

Determining That Receivables Are Presented at Net Realizable Value Is