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 type of receivable is most likely to be refunded to an employee, such as Susan, based on the taxes withheld and reported on her Form W-2?

Income tax receivable

Accounts receivable

Interest receivable

Notes receivable

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Verified step by step guidance

Understand the concept of receivables: Receivables are amounts owed to a company or individual, typically arising from transactions or obligations. In this case, the focus is on a refund related to taxes withheld.

Analyze the context of the problem: Susan is an employee, and the question refers to taxes withheld and reported on her Form W-2. Form W-2 is used to report wages and tax information to employees and the IRS.

Identify the type of receivable related to tax refunds: When taxes are withheld from an employee's paycheck, they may be eligible for a refund if the amount withheld exceeds their actual tax liability. This refund is categorized as an 'Income tax receivable.'

Compare the other options: Accounts receivable typically refers to amounts owed by customers for goods or services. Interest receivable refers to interest earned but not yet received. Notes receivable refers to amounts owed under formal agreements or promissory notes. None of these are related to tax refunds.

Conclude that the correct type of receivable in this scenario is 'Income tax receivable,' as it directly pertains to the refund of taxes withheld and reported on Form W-2.