Why are there negligible trade receivables for visitor admissions?

• A. Tickets are invoiced monthly
• B. Tickets are paid in advance or on the day
• C. Tickets are never paid
• D. There is a credit policy with long terms

Answer: (B)

Trade receivables are amounts owed to the business from sales made on credit. For visitor admissions, the ticket is paid either in advance or at the gate on the day of entry, so there isn’t an outstanding balance after the sale. Payments are collected immediately, which means there are no amounts left unpaid at the reporting date, making trade receivables negligible. If payments were invoiced later or extended over long credit terms, that would create accounts receivable, which isn’t the case here.