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 a trade receivable?

Tax refunds receivable from the government

Advances to employees

Interest receivable on loans

Accounts receivable from customers for goods sold on credit

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Verified step by step guidance

Understand the concept of trade receivables: Trade receivables are amounts owed to a business by its customers for goods sold or services provided on credit. These are directly related to the core operations of the business.

Analyze the options provided: Tax refunds receivable from the government, advances to employees, and interest receivable on loans are not directly related to the sale of goods or services to customers. These are classified under other receivables or assets.

Focus on the correct classification: Accounts receivable from customers for goods sold on credit are directly tied to the business's primary operations and represent trade receivables.

Differentiate trade receivables from other receivables: Trade receivables arise from the sale of goods or services, while other receivables (e.g., tax refunds, employee advances, interest receivable) arise from non-operational activities.

Conclude the classification: Based on the definition and analysis, accounts receivable from customers for goods sold on credit are classified as trade receivables.