Trade Receivables Quiz

What are trade receivables?

• Amounts owed by the business to suppliers

• Amounts owed by customers to the business for goods or services delivered

• Prepaid expenses

• Long-term loans

Which of the following is NOT a characteristic of trade receivables?

• Short-term nature

• Result from credit sales

• Involve interest payments

• Represent amounts due from customers

What is the term used to describe the process of collecting money owed by customers?

• Accounts payable

• Trade credit

• Receivables management

• Sales revenue

Which of the following would be included in the trade receivables balance?

• Accounts owed by suppliers

• Credit sales made to customers

• Loans from banks

• Accrued expenses

A company sells goods worth RM5,000 to a customer on credit. What will be the effect on trade receivables?

• Increase by RM5,000

• Decrease by RM5,000

• No effect on trade receivables

• Increase by RM10,000

Which of the following is the primary risk associated with trade receivables?

• Fraud

• Customer defaults on payment

• Supplier delays

• Depreciation

Which of the following is used to estimate the amount of trade receivables that may be uncollectible?

• Cash flow forecast

• Allowance for doubtful accounts

• Gross profit margin

• Operating expenses

If trade receivables are not collected within a specified period, they are typically classified as:

• Current assets

• Non-current assets

• Bad debts

• Inventories

When recognizing trade receivables under MFRS 132, which of the following criteria must be met?

• The receivable must have no fixed payment terms

• The receivable must be part of a financial liability

• The receivable must have a contractual right to receive cash or another financial asset

• The receivable must be related to a non-current asset

Which of the following is true about trade receivables classified as "current assets"?

• They are expected to be settled or collected within one year

• They are usually not due within the year

• They represent long-term loans to customers

• They include only overdue receivables