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Describe the following terms or accounts related to receivables
a) Receivables – what sorts of things are included
b) Trade receivables
c) Short versus long-term receivables
d) Accounts receivable
e) Non-trade receivables
|a||Receivables simply means the money owed to an entity by its customers which the entity is yet to receive.|
|Recevables shall include those money which the customers are yet to pay for the services provided or goods sold by the entity.|
|Accounts Receivables can be in the form of cash or cash equivalent or in the form of Notes which is known as Notes Receivable|
|It can also be in the form of Advances provided to employees or any other person other than customers.|
|b||Trade Receivables shall include only those receivables which the entity is yet to receive from its customers to whom any service is provided or goods are sold|
|c||Short-term receivables are those amount which are due for not more than 12 months, The range can be from a few days to 12 months, But in no case it can|
|exceed 12 months. If the Receivables have exceed 12 months then the same will be shown as Long-term receivables and not under Short-term Receivables.|
|Short-term Receivables are shown as Current Assets and Long-term Receivables are shown as Non-Current Assets.|
|d||Accounts Receivable and Trade Receivables are used alternatively and there is no such major difference.|
|Accounts Receivables shall include only those receivables which the entity is yet to receive from its customers to whom any service is provided or goods are sold on Account.|
|e||Non-Trade Receivables are those Receivables which is owed by virtue of any non-trading activity. In other words the amount owed due to any transaction which does not occur|
|in the normal course of business.|
Describe the following terms or accounts related to receivables a) Receivables – what sorts of things...
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