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Which of the following can result from the use of outdated or incorrect codes on a billing claim when accounting for receivables?

Automatic write-off of the receivable as bad debt

Reduction in the need for an allowance for doubtful accounts

Denial or delay of payment from customers or insurers

Immediate increase in cash collections

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Verified step by step guidance

Understand the context of the problem: The question is about the impact of using outdated or incorrect codes on billing claims in the accounting for receivables. Receivables represent amounts owed to a company by customers or insurers.

Recognize the importance of accurate billing codes: Billing codes are essential for ensuring proper communication with customers or insurers. Incorrect codes can lead to errors in processing claims, which may affect payment timelines.

Analyze the potential outcomes: Outdated or incorrect codes can result in denial or delay of payment from customers or insurers. This happens because the claim may not be processed correctly, requiring additional clarification or resubmission.

Evaluate the impact on accounting: Denial or delay of payment can affect the company's cash flow and may require adjustments in the accounting records, such as increasing the allowance for doubtful accounts to reflect the uncertainty of collection.

Conclude the importance of accuracy: To avoid these issues, companies should ensure their billing systems are updated regularly and staff are trained to use the correct codes, minimizing the risk of payment delays or denials.