Multiple Choice
Which of the following is an example of a trade receivable?
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7. Receivables and Investments
Types of Receivables
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Which business function is primarily responsible for credit management and collecting funds from customers?
A
Payroll
B
Accounts Receivable
C
Accounts Payable
D
Inventory Management
Verified step by step guidance1
Understand the role of each business function listed in the options: Payroll, Accounts Receivable, Accounts Payable, and Inventory Management.
Recognize that credit management involves monitoring customer credit limits and ensuring timely collection of funds owed by customers.
Identify that Accounts Receivable is the department responsible for tracking customer invoices, managing credit terms, and collecting payments.
Eliminate other options: Payroll deals with employee compensation, Accounts Payable handles payments to suppliers, and Inventory Management oversees stock levels and inventory control.
Conclude that the correct business function responsible for credit management and collecting funds from customers is Accounts Receivable.
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