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

Royalties are generally reported on which type of receivable form in financial accounting?

Notes Receivable

Other Receivables

Accounts Receivable

Trade Receivables

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Verified step by step guidance

Understand the concept of royalties: Royalties are payments made to the owner of a property, patent, or asset for its use, typically calculated as a percentage of revenue or profit generated from the asset.

Review the types of receivables: Receivables are amounts owed to a company by customers or other entities. Common types include Accounts Receivable (amounts due from customers for goods or services), Notes Receivable (formal written promises to pay), Trade Receivables (amounts due from customers in the normal course of business), and Other Receivables (miscellaneous amounts owed to the company).

Analyze the nature of royalties: Royalties are not typically tied to the sale of goods or services in the normal course of business, nor are they formalized through written promissory notes. They are classified as miscellaneous income.

Determine the correct classification: Since royalties do not fall under Accounts Receivable, Notes Receivable, or Trade Receivables, they are reported under 'Other Receivables' in financial accounting.

Conclude the reasoning: Royalties are categorized as 'Other Receivables' because they represent miscellaneous amounts owed to the company that do not arise from the sale of goods or services or formal promissory notes.