Ideally, a company should measure receivables in terms of their present value, that is, the discounted value of the cash to be received in the future.

Question

Quizplus · Accepted Answer

By measuring receivables in present value, the company can better estimate the true value of the assets they hold and assess the potential risk of non-payment. This approach takes into account the time value of money and can help avoid overestimating the value of accounts receivable.

Ideally, a Company Should Measure Receivables in Terms of Their