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 best describes irregular receivables, and which is an example?

Receivables that are generated from regular sales of goods or services on credit.

Receivables that arise from non-routine transactions, such as advances to employees or claims for damages.

Receivables that are always collected within the same accounting period.

Receivables that are only related to interest income from investments.

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Verified step by step guidance

Step 1: Understand the concept of receivables. Receivables are amounts owed to a company by customers or other parties, typically arising from credit sales or other transactions.

Step 2: Differentiate between regular and irregular receivables. Regular receivables are generated from routine transactions, such as sales of goods or services on credit. Irregular receivables arise from non-routine transactions, such as advances to employees, claims for damages, or other unique situations.

Step 3: Analyze the options provided in the problem. Identify which descriptions align with irregular receivables. For example, irregular receivables are not tied to regular sales, are not always collected within the same accounting period, and are not exclusively related to interest income from investments.

Step 4: Match the correct description to irregular receivables. The correct description is: 'Receivables that arise from non-routine transactions, such as advances to employees or claims for damages.'

Step 5: Consider examples of irregular receivables. Examples include employee loans, insurance claims, or legal settlements, which are not part of the company's regular business operations.