Trade creditors only
Trade debtors only
Trade debtors and bill receivable
Trade creditors and bill payable
Answer is Right!
Answer is Wrong!
The correct answer is C. Trade debtors and bill receivable.
Trade debtors are amounts owed to a company by its customers for goods or services that have been sold on credit. Bill receivable is a document that acknowledges a debt and promises payment at a future date.
Trade creditors are amounts owed by a company to its suppliers for goods or services that have been purchased on credit. Bill payable is a document that acknowledges a debt and promises payment at a future date.
Therefore, the word ‘receivables’ includes trade debtors and bill receivable, but not trade creditors and bill payable.
Here is a more detailed explanation of each option:
- Option A: Trade creditors only. This is incorrect because trade creditors are amounts owed by a company to its suppliers for goods or services that have been purchased on credit. This is not the same as receivables, which are amounts owed to a company by its customers.
- Option B: Trade debtors only. This is incorrect because trade debtors are amounts owed to a company by its customers for goods or services that have been sold on credit. This is not the same as receivables, which can also include bill receivable.
- Option C: Trade debtors and bill receivable. This is the correct answer because trade debtors and bill receivable are both types of receivables.
- Option D: Trade creditors and bill payable. This is incorrect because trade creditors and bill payable are both types of payables. Payables are amounts owed by a company to its suppliers and other creditors. This is not the same as receivables, which are amounts owed to a company by its customers.