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 best describes the information that credit agencies provide to lenders about an applicant?

The applicant's tax filing status

The applicant's current inventory levels

The applicant's projected future sales

The applicant's credit history and ability to repay debts

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Verified step by step guidance

Understand the role of credit agencies: Credit agencies collect and provide information about an individual's or business's financial behavior, specifically focusing on their credit history and ability to repay debts.

Clarify what credit history entails: Credit history includes details such as past loans, payment patterns, outstanding debts, and any defaults or bankruptcies. This helps lenders assess the applicant's reliability.

Explain why tax filing status, inventory levels, or projected future sales are not relevant: These factors are not typically part of the credit agency's report because they do not directly reflect the applicant's creditworthiness or repayment ability.

Highlight the importance of repayment ability: Credit agencies evaluate the applicant's ability to repay debts based on their financial track record, which is crucial for lenders to make informed decisions.

Conclude with the correct answer: The information provided by credit agencies is focused on the applicant's credit history and ability to repay debts, as this is the most relevant data for lenders assessing risk.