Embedded Files
1. What are receivables?
1. What are receivables?
A company's claims to the future collection of cash, other assests, or services.
2. What are accounts receivable?
2. What are accounts receivable?
Receivables resulting from the sale of goods or services on account.
3. What is a note receivable?
3. What is a note receivable?
A note receivable is a receivable - either trade or non-trade - that is accompanied by promissory note (i.e., a signed document).
4. What is a trade discount?
4. What is a trade discount?
Trade discounts allow a customer to pay an amount that is below the list price. These are not treated as variable consideration.
5. What is a sales (or cash) discount?
5. What is a sales (or cash) discount?
If a customer pays within 30 days, customer can pay a discounted price. This is variable consideration.
6. What are the gross and net methods?
6. What are the gross and net methods?
Gross method: The seller initially assumes the discount will not be taken and revenue is adjusted downwards when the discount is taken.
Net method: The seller initally assumes the discount will be taken and revenue is adjusted upwards when the discount is forfeited.Â
Page updated
Google Sites
Report abuse