Note – Please take our quiz ‘Quiz 10 – Accounts Receivable – Intermediate’ on this page before going through the below answers. Only the top 3% of our audience score 10/10 in all of them.
- Name – Quiz 10 – Accounts Receivable – Intermediate
- Topic – Accounting Receivable
- Answers with Explanations
Q1. Accounts Receivable is an obligation that originates because of _____ made on credit.
Ans. Accounts Receivable is an obligation that originates because of sales made on credit. It means that the business entity has yet to collect the money from the purchaser.
Q2. Accounts receivable is a _____.
Ans. Accounts receivable is a short-term asset. It is expected that the receivables will be received in a year or less and so are classified as short term assets.
Q3. Accounts receivable is also known as _____.
Ans. Accounts receivable is also known as trade debtors. Accounts receivable is the amount yet to be received from the purchaser for the trade that the entity carried out with a debtor. Therefore it is also called trade debtors.
Q4. Under which head of the balance sheet are receivables shown?
Ans. Receivables are shown under current assets. Receivables are expected to be received in a year or less and so are included in the current assets head.
Q5. _____ is internal document issued to customers.
Ans. Sales order is internal document issued to customers. It is made to confirm the sale of goods or services involved in a given transaction. The document contains details about the sale, including the quantity, quality, and price of any goods or services exchanged.
Q6. Accounts receivable should be collected from the customer within _____.
Ans. Accounts receivable should be collected from the customer within an agreed period of time. There is no fixed time period under which receivables should be collected. It is decided by the buyer and seller depending on the credit facility the seller is ready to give
Q7. Receivable process is also known as _____ in larger corporations.
Ans. Receivable process is also known as O2C in larger corporations. Order to Cash (O2C) is the business process that covers the entirety of the order processing system right from receiving the order to up until the point the payment is made and an entry is logged in accounting books.
Q8. Receivables effect the _____ of a company.
Ans. Receivables effect the working capital of a company. If accounts receivable decreases and cash increases, there is no effect on current assets and thus working capital. However, if accounts receivable decreases because aged receivables are written off, then, current assets decrease and so does working capital.
Q9. Receivables affect _____ ratio of a company.
Ans. Receivables affect current ratio of a company. Current Ratio = Current Assets/Current Liabilities. Thus, if there are changes in the receivables (current asset) of a company then it will in turn impact the current ratio.
Q10. Accounts receivable is also known as _____ receivable.
Ans. Accounts receivable is also known as trade receivable. Accounts receivables are the amounts which are yet to be collected by the debtors with whom the business has carried out trade.
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