Debtors and Bills Receivable are shown as _________a)Trade Payablesb)Cheques in handc)Trade Receivablesd)None of theseCorrect answer is option 'C'. Can you explain this answer?

Question

Answer

Trade receivables are amounts billed by a business to its customers when it delivers goods or services to them in the ordinary course of business. These billings are typically documented on formal invoices, which are summarized in an accounts receivable aging report. This report is commonly used by the collections staff to collect overdue payments from customers. In the general ledger, trade receivables are recorded in a separate accounts receivable account, and are classified as current assets on the balance sheet if you expect to receive payment from customers within one year.

Answer

Becaz these are current  assets of company becaz these can be converted into cash in a accounting period or operating cycle ......tx

Answer

Trade recivable

Answer

These are part of trade receivable because both are current assets that can be converted into cash within a very short period.

Answer

Debtors and Bills Receivable are shown as Trade Receivables.

Explanation:

Debtors and Bills Receivable are two important components of a company's financial statements that represent amounts owed to the company by its customers. These amounts are considered as assets of the company as they are expected to be received in the future.

1. Trade Receivables:
- Trade Receivables, also known as accounts receivable, are the amounts owed to a company by its customers for the sale of goods or services on credit.
- It represents the total outstanding amount due from customers for credit sales.
- Trade Receivables are considered as current assets on the balance sheet, as they are expected to be collected within a year.
- They are classified under the category of Trade Receivables because they arise from the normal course of business operations.

2. Debtor:
- A debtor is an individual, company, or organization that owes money to another party, typically a company or a creditor.
- It is a customer who has purchased goods or services on credit and has an outstanding balance to be paid.
- Debtor is a specific term used to refer to an individual or entity that owes money.
- Debtor is a part of the Trade Receivables category as it represents the total outstanding amount due from customers.

3. Bills Receivable:
- Bills Receivable refers to the negotiable instruments, such as promissory notes or bills of exchange, that are accepted by a company's customers to acknowledge their debt.
- These bills are written promises to pay a specific amount of money at a future date.
- Bills Receivable are considered as assets on the balance sheet, as they represent the amount due to be received from the customer.
- Bills Receivable are also classified under the category of Trade Receivables, as they arise from credit sales.

In summary, Debtors and Bills Receivable are both components of Trade Receivables, which represent the amounts owed to a company by its customers for credit sales. They are shown as Trade Receivables in the financial statements.

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