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 asset accounts is increased when a receivable is collected?

Accounts Receivable

Cash

Inventory

Prepaid Expenses

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Verified step by step guidance

Understand the nature of the transaction: When a receivable is collected, it means that the company has received cash from a customer who previously owed money. This transaction affects the asset accounts.

Identify the accounts involved: Accounts Receivable represents money owed to the company by customers, while Cash represents the physical or electronic money the company has on hand.

Determine the impact on Accounts Receivable: When a receivable is collected, the Accounts Receivable account decreases because the customer has paid their debt, and the company no longer expects payment from them.

Determine the impact on Cash: The Cash account increases because the company has received payment, which adds to its available funds.

Conclude which asset account is increased: Since the collection of a receivable results in an increase in the Cash account, Cash is the correct answer.