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

Notes Receivable

Financial Accounting

7. Receivables and Investments

Notes Receivable

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Multiple Choice

A loan obtained for a home purchase is classified as which type of note receivable?

Installment note receivable

Trade note receivable

Mortgage note receivable

Promissory note receivable

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Verified step by step guidance

Understand the concept of a note receivable: A note receivable is a written promise for a borrower to pay a specific amount of money at a future date. It is classified based on the purpose and terms of the loan.

Review the types of note receivables: Installment note receivable involves periodic payments, trade note receivable is related to business transactions, promissory note receivable is a general promise to pay, and mortgage note receivable is specifically tied to real estate loans.

Identify the context of the loan: The problem states that the loan is obtained for a home purchase, which is directly related to real estate.

Match the loan type to the correct classification: Loans for home purchases are secured by the property itself, making them classified as mortgage note receivables.

Conclude that the correct classification for a loan obtained for a home purchase is 'Mortgage note receivable,' as it aligns with the nature of the loan and its security.