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 types of receivables is considered the most liquid asset?

Accounts Receivable

Interest Receivable

Notes Receivable

Inventory

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Understand the concept of liquidity: Liquidity refers to how quickly an asset can be converted into cash without significant loss of value. The more liquid an asset, the faster it can be turned into cash.

Analyze the options provided: Accounts Receivable, Interest Receivable, Notes Receivable, and Inventory. Each represents a different type of asset with varying degrees of liquidity.

Evaluate Accounts Receivable: Accounts Receivable represents amounts owed by customers for goods or services already delivered. It is typically considered highly liquid because it is expected to be collected within a short period, often 30 to 60 days.

Compare Interest Receivable and Notes Receivable: Interest Receivable refers to interest earned but not yet received, which may take longer to collect. Notes Receivable represents formal written promises to pay, often with longer collection periods, making them less liquid than Accounts Receivable.

Assess Inventory: Inventory consists of goods available for sale. It is the least liquid of the options because it must first be sold and converted into Accounts Receivable or cash, which can take time and effort.