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?

Amounts owed by customers for goods sold on credit

Advances to suppliers

Interest receivable from investments

Loans made to employees

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Understand the definition of accounts receivable: Accounts receivable represents amounts owed to a business by its customers for goods or services sold on credit. It is recorded as an asset on the balance sheet.

Analyze the first option: 'Amounts owed by customers for goods sold on credit.' This matches the definition of accounts receivable because it involves customers owing money for credit sales.

Analyze the second option: 'Advances to suppliers.' This does not qualify as accounts receivable because it represents a prepayment made by the business to suppliers, not amounts owed by customers.

Analyze the third option: 'Interest receivable from investments.' This is not accounts receivable because it represents interest income earned but not yet received, which is classified as interest receivable, a separate account.

Analyze the fourth option: 'Loans made to employees.' This is not accounts receivable because it represents a loan asset, not amounts owed by customers for credit sales.