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

At what amount are accounts receivable initially recorded on the balance sheet?

At their net realizable value

At their estimated collectible amount

At their face (invoice) amount

At their present value

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Verified step by step guidance

Understand the concept of accounts receivable: Accounts receivable represent amounts owed to a company by its customers for goods or services provided on credit.

Identify how accounts receivable are initially recorded: Accounts receivable are recorded at their face (invoice) amount, which is the amount stated on the invoice issued to the customer.

Clarify why accounts receivable are recorded at face value: The face value reflects the original amount owed by the customer before any adjustments, such as allowances for doubtful accounts or discounts, are applied.

Distinguish between face value and other values: Net realizable value and estimated collectible amount are adjusted figures that account for potential uncollectible amounts, but these adjustments are made after the initial recording.

Understand the role of present value: Present value is typically used for long-term receivables or payables, not for short-term accounts receivable, which are recorded at face value.