Trade accounts receivable are valued and reported on the balance sheet
A) in the investment section.
B) at gross amounts less sales returns and allowances.
C) at net realizable value.
D) only if they are not past due.

Question

Quizplus · Accepted Answer

Trade accounts receivable are valued and reported on the balance sheet at net realizable value, which is the amount expected to be collected after deducting any allowances for doubtful accounts. This reflects the conservative approach of reporting receivables at their true economic value. Option A is incorrect as trade accounts receivable are not considered investments. Option B is incorrect as sales returns and allowances are deducted from gross sales, not trade accounts receivable. Option D is incorrect as past due receivables can still be reported on the balance sheet, but may require additional disclosure and allowance for potential bad debts.

Trade Accounts Receivable Are Valued and Reported on the Balance