The valuation problem from waiting to collect a receivable is ignored in the valuation of receivables and notes that are classified as current assets.

Question

Quizplus · Accepted Answer

The valuation problem from waiting to collect a receivable is ignored in the valuation of receivables and notes that are classified as current assets. This is because current assets are expected to be collected within a short period of time (usually within a year) and their value is recorded at their face value or original amount due. The potential delay or risk of non-collection is not factored in when valuing current assets. However, for long-term assets, the potential delay or risk of non-collection is taken into account when valuing them.

The Valuation Problem from Waiting to Collect a Receivable Is