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

Cantrell Company is required by law to collect which of the following types of receivables from customers on behalf of the government?

Interest receivable

Sales taxes receivable

Notes receivable

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 entities. They can include various types such as accounts receivable, notes receivable, interest receivable, and sales taxes receivable.

Recognize the role of sales taxes: Sales taxes are amounts collected by businesses from customers on behalf of the government. These taxes are not revenue for the business but are liabilities until they are remitted to the government.

Differentiate between the types of receivables: Interest receivable refers to interest earned but not yet received, notes receivable are formal written promises to pay, and accounts receivable are amounts owed by customers for goods or services provided. Sales taxes receivable, however, are specifically collected for the government.

Identify the legal requirement: Businesses are legally required to collect sales taxes from customers during transactions and hold them as a liability until they are paid to the government. This makes sales taxes receivable unique among the options provided.

Conclude that the correct answer is sales taxes receivable, as it is the type of receivable Cantrell Company is required by law to collect on behalf of the government.