Receivables are normally reported on the balance sheet at net realizable value.In contrast,payables are carried at face value.Which accounting principle requires this treatment of payables?
A)Materiality concept
B)Monetary unit assumption
C)Going concern assumption
D)Realizability concept

Question

Quizplus · Accepted Answer

Unless there is evidence to the contrary,companies are assumed to be going concerns that will continue to operate.Under this going concern assumption,companies expect to pay their obligations in full.Notes payable are therefore reported at face value.In contrast,companies need to estimate the net realizable value of receivables,which is the amount of receivables a company expects to actually collect.

Receivables Are Normally Reported on the Balance Sheet at Net