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 generated when a company earns income from renting out its property?

Accounts receivable

Notes receivable

Rent receivable

Interest receivable

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Verified step by step guidance

Understand the concept of receivables: Receivables are amounts owed to a company by customers or other parties. They are classified based on the nature of the transaction that generated them.

Analyze the scenario: The company earns income from renting out its property. This indicates that the receivable is related to rental income.

Identify the correct type of receivable: Receivables related to rental income are specifically categorized as 'Rent receivable.' This is distinct from other types of receivables such as accounts receivable (from sales of goods/services), notes receivable (formal written promises to pay), or interest receivable (earned interest).

Clarify why other options are incorrect: Accounts receivable typically arise from sales transactions, notes receivable involve formal agreements, and interest receivable pertains to earned interest. None of these directly relate to rental income.

Conclude: The correct type of receivable for income earned from renting out property is 'Rent receivable,' as it directly corresponds to the nature of the transaction.