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 are typically included in current assets on the balance sheet?

Notes receivable due in 3 years

Interest receivable

Advances to employees repayable in 2 years

Accounts receivable

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Verified step by step guidance

Understand the concept of current assets: Current assets are resources expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

Identify the types of receivables mentioned in the problem: Notes receivable due in 3 years, interest receivable, advances to employees repayable in 2 years, and accounts receivable.

Evaluate each receivable based on its time frame: Notes receivable due in 3 years and advances to employees repayable in 2 years are long-term assets because they exceed the one-year or operating cycle threshold.

Focus on receivables that meet the current asset criteria: Interest receivable and accounts receivable are typically included in current assets because they are expected to be collected within one year or the operating cycle.

Conclude that the correct receivables to be included in current assets are interest receivable and accounts receivable, as they align with the definition of current assets.