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 types of receivables is considered a source of cash for a company?

Collection of accounts receivable

Issuance of notes receivable

Increasing allowance for doubtful accounts

Writing off uncollectible receivables

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Verified step by step guidance

Understand the concept of receivables: Receivables represent amounts owed to a company by customers or other parties. They are considered assets because they are expected to be converted into cash in the future.

Analyze the options provided: Each option represents a different type of activity related to receivables. Determine which activity directly results in cash inflow for the company.

Option 1: Collection of accounts receivable - This involves receiving payment from customers for amounts owed, which directly increases the company's cash balance.

Option 2: Issuance of notes receivable - This involves creating a formal agreement for payment in the future, but it does not immediately result in cash inflow.

Option 3 and 4: Increasing allowance for doubtful accounts and writing off uncollectible receivables - These are accounting adjustments that affect the valuation of receivables but do not generate cash inflow.