Question

In: Accounting

Identify whether each statement is true or false. When initially recognized, accounts receivables are required to have a...

1. When initially recognized, accounts receivables are required to have a valuation allowance based on expected credit losses for their lifetime.

2. For a new company with no history of uncollectible accounts, receivables can be written off when they are determined uncollectible.

3. Aging of accounts receivable is often done to determine an allowance for doubtful accounts.

4. When initially recognized, notes receivables are required to have a valuation allowance based on expected credit losses for their lifetime.

5. In ASPE, impairment of notes receivables is considered only if there is objective evidence of a loss.

 

Required:

Identify whether each statement is true or false.

Solutions

Expert Solution

 

1.  T

 

2. F

All receivables are required to estimate credit losses. A new company would use other information e.g. industry information to do estimate. If still could not estimate, defer revenue recognition until cash collected.

 

3.  T

 

4. F

Notes receivables are only required to recognize expected losses for the next 12 months on initial recognition.

 

5.  T

 

 

Junaid answered 1 year ago
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