Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Types of Receivables

Financial Accounting

7. Receivables and Investments

Types of Receivables

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Multiple Choice

Which of the following is classified as an accounts receivable in financial accounting?

Amounts owed by customers for goods sold on credit

Equipment used for food preparation

Cash on hand in the restaurant's register

Raw ingredients stored in the kitchen

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Verified step by step guidance

Understand the concept of accounts receivable: Accounts receivable refers to amounts owed to a business by its customers for goods or services provided on credit. It represents a current asset on the balance sheet.

Analyze the first option: 'Amounts owed by customers for goods sold on credit.' This directly aligns with the definition of accounts receivable, as it represents money owed by customers for credit sales.

Evaluate the second option: 'Equipment used for food preparation.' Equipment is classified as a fixed asset, not an accounts receivable, because it is a physical asset used in operations rather than a receivable amount.

Evaluate the third option: 'Cash on hand in the restaurant's register.' Cash is classified as a current asset but not an accounts receivable, as it represents liquid funds rather than amounts owed by customers.

Evaluate the fourth option: 'Raw ingredients stored in the kitchen.' Raw ingredients are classified as inventory, which is a current asset, but not an accounts receivable, as it represents goods held for sale or use rather than amounts owed by customers.