Multiple Choice
Which type of bank documentation increases a company's checking account balance at the bank?
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7. Receivables and Investments
Types of Receivables
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Which of the following is a common type of receivable reported on a company's balance sheet?
A
Accounts Receivable
B
Notes Receivable
C
Inventory
D
Bonds Payable
Verified step by step guidance1
Understand the concept of receivables: Receivables are amounts owed to a company by its customers or other parties. They are considered assets and are reported on the balance sheet.
Identify the types of receivables: Common types of receivables include Accounts Receivable and Notes Receivable. These represent amounts due from customers or other entities for goods sold or services rendered.
Differentiate between receivables and other items: Inventory and Bonds Payable are not receivables. Inventory is a current asset representing goods available for sale, while Bonds Payable is a liability representing amounts owed by the company to bondholders.
Focus on the balance sheet classification: Receivables are classified as current assets if they are expected to be collected within one year. Accounts Receivable and Notes Receivable typically fall under this category.
Conclude with the correct answer: Based on the definitions and classifications, the common types of receivables reported on a company's balance sheet are Accounts Receivable and Notes Receivable.
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