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 involves both the risk of loss and title passing to the buyer?

Factoring without recourse

Assignment of receivables

Factoring with recourse

Pledging of receivables

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Verified step by step guidance

Understand the concept of receivables: Receivables are amounts owed to a company by its customers for goods or services provided. They are considered assets on the balance sheet.

Learn about factoring: Factoring is a financial transaction where a company sells its receivables to a third party (factor) at a discount to receive immediate cash. Factoring can be done with or without recourse.

Differentiate between factoring with and without recourse: Factoring with recourse means the seller retains the risk of loss if the receivables are not collected. Factoring without recourse means the buyer (factor) assumes the risk of loss, and title passes to the buyer.

Understand assignment and pledging of receivables: Assignment involves transferring receivables to a lender as collateral for a loan, but the company retains ownership and collection responsibility. Pledging involves using receivables as collateral without transferring ownership or collection responsibility.

Identify the correct answer: Factoring without recourse involves both the risk of loss and title passing to the buyer, as the factor assumes the risk and ownership of the receivables.