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 type of receivable typically involves the borrower repaying different amounts each month based on usage or outstanding balance?

Installment loans

Credit card receivables

Notes receivable

Trade accounts receivable

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Verified step by step guidance

Understand the concept of receivables: Receivables are amounts owed to a company by customers or other parties. Different types of receivables have unique characteristics based on the repayment terms and usage.

Analyze the repayment structure of installment loans: Installment loans involve fixed payments over a set period, typically not varying based on usage or outstanding balance.

Examine the repayment structure of credit card receivables: Credit card receivables involve repayments that vary based on the borrower's usage and outstanding balance. This is because credit card users can make purchases of varying amounts, and their monthly payments depend on the balance owed and interest accrued.

Review notes receivable: Notes receivable are formal written promises to pay a specific amount at a future date, often with fixed terms, and do not typically involve varying monthly payments based on usage.

Consider trade accounts receivable: Trade accounts receivable arise from sales of goods or services on credit and are usually repaid in a lump sum or fixed terms, not varying based on usage or balance.