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

If a loan is not repaid, a lender may claim which of the following as the promised item of value?

Accounts Receivable

Allowance for Doubtful Accounts

Collateral

Notes Payable

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Verified step by step guidance

Understand the concept of collateral: Collateral is an asset or item of value that a borrower offers to a lender as security for a loan. If the borrower fails to repay the loan, the lender has the right to seize the collateral to recover the loan amount.

Review the options provided: Accounts Receivable, Allowance for Doubtful Accounts, Collateral, and Notes Payable. Determine which of these represents an item of value that can be claimed by the lender in case of non-repayment.

Eliminate incorrect options: Accounts Receivable refers to money owed to a company by its customers, not an item pledged for a loan. Allowance for Doubtful Accounts is an accounting estimate for uncollectible receivables, not a tangible asset. Notes Payable represents a liability, not an item of value pledged as security.

Identify the correct option: Collateral is the promised item of value that a lender may claim if a loan is not repaid. It is specifically pledged by the borrower to secure the loan.

Conclude the reasoning: Collateral is the correct answer because it directly aligns with the definition of an item of value pledged to secure a loan and recoverable by the lender in case of default.