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' in financial accounting?

Amounts owed by customers for goods or services sold on credit

Interest receivable from investments

Loans made to employees

Advances to suppliers

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Verified step by step guidance

Understand the concept of 'accounts receivable': Accounts receivable refers to amounts owed to a business by its customers for goods or services sold on credit. It represents a current asset on the balance sheet.

Analyze the first option: 'Amounts owed by customers for goods or services sold on credit.' This directly aligns with the definition of accounts receivable, as it involves credit sales to customers.

Evaluate the second option: 'Interest receivable from investments.' This is not classified as accounts receivable because it pertains to income earned from investments, not credit sales to customers.

Assess the third option: 'Loans made to employees.' Loans to employees are considered 'other receivables' or 'advances,' not accounts receivable, as they are unrelated to credit sales to customers.

Review the fourth option: 'Advances to suppliers.' Advances to suppliers are prepayments for goods or services and are classified as prepaid expenses, not accounts receivable.