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 is classified as an account receivable?

Notes receivable due in more than one year

Amounts owed by customers for goods sold on credit

Interest receivable from investments

Advances to employees for travel expenses

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Verified step by step guidance

Step 1: Understand the concept of accounts receivable. Accounts receivable refers to amounts owed to a company by its customers for goods or services provided on credit. It is recorded as a current asset on the balance sheet.

Step 2: Analyze the options provided in the problem. The goal is to identify which option fits the definition of accounts receivable.

Step 3: Evaluate 'Notes receivable due in more than one year.' Notes receivable are formal written promises to pay a certain amount, often including interest, and if due in more than one year, they are classified as long-term assets, not accounts receivable.

Step 4: Evaluate 'Interest receivable from investments.' Interest receivable is an amount earned but not yet received, typically related to investments, and is not classified as accounts receivable.

Step 5: Evaluate 'Amounts owed by customers for goods sold on credit.' This fits the definition of accounts receivable because it represents money owed by customers for goods or services provided on credit.