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 types of receivables can result from a failure to repay a loan?

Bad debts

Trade receivables

Interest receivable

Notes receivable

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Verified step by step guidance

Understand the concept of receivables: Receivables are amounts owed to a company by its customers or other parties. They are classified into different types based on the nature of the transaction.

Define bad debts: Bad debts occur when a debtor fails to repay the amount owed, and the company determines that the receivable is uncollectible. This typically results from financial difficulties faced by the debtor.

Explain trade receivables: Trade receivables arise from the sale of goods or services on credit. They represent amounts owed by customers for purchases made on account.

Clarify interest receivable: Interest receivable is the amount of interest earned but not yet received. It typically arises from loans or investments where interest income is accrued over time.

Describe notes receivable: Notes receivable are formal written promises to pay a specific amount of money at a future date. They often include interest and are used for loans or credit agreements. Failure to repay a loan can result in bad debts, which are associated with notes receivable.