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Multiple Choice
5. Which of the following is NOT considered a type of receivable in financial accounting?
A
Accounts Receivable
B
Notes Receivable
C
Interest Receivable
D
Accounts Payable
Verified step by step guidance
1
Step 1: Understand the concept of receivables in financial accounting. Receivables are amounts owed to a company by customers or other parties, typically resulting from sales or lending activities. They are classified as assets on the balance sheet.
Step 2: Review the types of receivables mentioned in the problem: Accounts Receivable, Notes Receivable, and Interest Receivable. These are all examples of receivables because they represent amounts owed to the company.
Step 3: Analyze the term 'Accounts Payable.' Accounts Payable is not a receivable; it is a liability. It represents amounts the company owes to suppliers or creditors for goods or services received.
Step 4: Compare the terms provided in the question. Identify that Accounts Payable is fundamentally different from the other options because it is a liability, not an asset.
Step 5: Conclude that the correct answer is 'Accounts Payable,' as it is NOT considered a type of receivable in financial accounting.