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

Sales to customers in which the customers pay within 30 to 60 days are referred to as:

Unearned revenue

Interest receivable

Notes receivable

Accounts receivable

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Verified step by step guidance

Understand the concept of accounts receivable: Accounts receivable refers to the amounts owed by customers for goods or services provided on credit. These are typically paid within a short period, such as 30 to 60 days.

Review the definition of unearned revenue: Unearned revenue represents money received by a company for goods or services that have not yet been delivered or performed. It is not related to credit sales.

Clarify the meaning of interest receivable: Interest receivable refers to interest income that has been earned but not yet received in cash. It is unrelated to sales transactions.

Explain notes receivable: Notes receivable are formal written agreements where a customer promises to pay a specific amount at a future date, often including interest. This is different from accounts receivable, which is less formal and typically short-term.

Conclude why accounts receivable is the correct answer: Sales to customers on credit, where payment is expected within 30 to 60 days, are recorded as accounts receivable because they represent amounts owed by customers for credit sales.