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Which of the following is NOT correct in respect of trade receivables as per Schedule III of the Companies Act 2013? |
These are classified as current and non-current. Trade receivables realised beyond twelve months from reporting date/operating cycle starting from the date of their recognition are classified as “Other non Current assets" Trade receivables realised within a period twelve months of reporting date/operating cycle are classified as Current assets. None of the Above |
None of the Above |
The correct answer is option 4- None of the Above. Trade receivables represent amounts owed to a company by its customers for goods or services that have been delivered but not yet paid for. They are recorded as assets on the balance sheet of the company. Trade receivables arise as a result of credit sales, where the seller extends credit terms to the buyer, allowing them to pay at a later date. They can be classified as current and non current according to period of receiving. Trade receivables realised beyond twelve months from reporting date/operating cycle starting from the date of their recognition are classified as “Other non-current assets” under the head non-current assets with Note to Accounts. Others are classified as current assets and shown on the face of the balance sheet. All the statements are correct about trade receivables. Therefore, the correct answer is option 4 i.e. none of the above. |
