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

Notes receivable are classified as which of the following on the balance sheet?

Asset

Liability

Revenue

Equity

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Verified step by step guidance

Understand the nature of notes receivable: Notes receivable represent amounts owed to a company by its customers or other parties, typically documented in a formal written agreement. They are considered a financial asset.

Review the classification of assets on the balance sheet: Assets are resources owned by a company that provide future economic benefits. Notes receivable fall under this category because they represent a claim to cash or other benefits in the future.

Differentiate notes receivable from liabilities: Liabilities are obligations the company owes to others, such as loans or accounts payable. Notes receivable are not obligations but rather amounts owed to the company, making them assets.

Compare notes receivable to revenue: Revenue represents income earned from the sale of goods or services during a specific period. Notes receivable are not income but rather a financial claim, so they are classified as assets, not revenue.

Confirm that notes receivable are not equity: Equity represents the ownership interest in the company, such as common stock or retained earnings. Notes receivable do not represent ownership but rather a financial asset, confirming their classification as an asset.