Asked by Rainn Cline on Apr 25, 2024

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The quality of receivables refers to:

A) The creditworthiness of sellers.
B) The method of collection.
C) The likelihood of collection without loss.
D) Sales turnover.
E) The interest rate.

Quality of Receivables

An assessment of the likelihood that the receivables will be collected on time, reflecting the creditworthiness of a company's customers.

Likelihood of Collection

The probability that debts owed to a company will be paid by its debtors.

  • Recognize the accounting treatments for bad debts and the quality of receivables.
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itunu feyintolaApr 30, 2024
Final Answer :
C
Explanation :
The quality of receivables refers to the likelihood of collection without loss. It is a measure of how collectible the receivables are and how likely they are to be paid on time. This can be affected by factors such as the creditworthiness of the customers, the age of the receivables, and any disputes or issues that may affect collection. It is important for businesses to monitor the quality of their receivables to ensure that they are managing their cash flow effectively and minimizing the risk of bad debt.