36) Which of the following statements regarding receivables is correct? A) A receivable occurs when a business makes a cash sale of goods or services to another party. B) A receivable is the right to pay cash in the future from a current receivable transaction. C) Each receivable transaction involves three parties. D) Receivables occur when a business loans money to another party. 7. 37) Which of the following should be classified as a long-term asset? A) Accounts Receivable B) Notes Receivable, due in 5 years C) Interest Receivable D) Cash equivalents 38) Which of the following statements regarding the allowance method of accounting for uncollectible receivables is incorrect? A) The allowance method is based on the matching principle. B) The business does not wait to see which customers will not pay when estimating the allowance for bad debts. C) The Allowance for Bad Debts is used to hold the pool of "unknown" uncollectible accounts. D) Bad debt expense is not estimated. 39) Which of the following is TRUE of the balance sheet presentation of the Allowance for Bad Debts? A) It is shown as a contra account related to accounts receivable. B) It is reported as an operating expense. C) It is reported as a current liability. D) It is reported as a separate, independent line item under current assets. 40) After the December 31, 2019 adjusting journal entries have been posted, Sinclair Enterprises has the following account balances (all accounts have normal balances): Account Balance Account Title Accounts Receivable $154,000 Allowance for Bad Debts $4,700 Bad Debts Expense $8,000 What is the net realizable value of accounts receivable as of December 31, 2019? A) $141 300 B) S146,000 C) $149,300 D) $158,700