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 term refers to amounts owed to a business by its customers for goods or services delivered on credit?

Prepaid Expenses

Inventory

Notes Payable

Accounts Receivable

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Verified step by step guidance

Understand the concept of Accounts Receivable: Accounts Receivable refers to the amounts owed to a business by its customers for goods or services delivered on credit. It represents a current asset on the balance sheet.

Differentiate Accounts Receivable from other terms: Prepaid Expenses are payments made in advance for goods or services to be received in the future. Inventory refers to goods available for sale. Notes Payable are written promises to pay a certain amount of money, typically a liability.

Recognize the relationship between Accounts Receivable and credit sales: When a business sells goods or services on credit, it records the amount owed by the customer as Accounts Receivable.

Understand the accounting treatment: Accounts Receivable is recorded as a debit in the Accounts Receivable account and a credit in the Revenue account when the sale is made.

Review the classification: Accounts Receivable is classified as a current asset because it is expected to be converted into cash within one year or the operating cycle of the business.