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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Under the topic of types of receivables, how is inventory classified on the balance sheet?

As a liability

As an accounts receivable

As a notes receivable

As an asset, but not as a receivable

Previous problemNext problem

Verified step by step guidance

Understand the concept of receivables: Receivables are amounts owed to a company by customers or other parties, typically classified as current assets on the balance sheet. Examples include accounts receivable and notes receivable.

Recognize the classification of inventory: Inventory refers to goods available for sale or raw materials used in production. It is not considered a receivable because it does not represent an amount owed to the company.

Identify the correct classification of inventory: Inventory is classified as an asset on the balance sheet, specifically under current assets if it is expected to be sold or used within one year.

Distinguish inventory from receivables: Unlike receivables, inventory is a tangible asset that the company owns and intends to sell or use in operations, rather than an amount owed by external parties.

Conclude the classification: Inventory is correctly classified as an asset on the balance sheet, but it is not categorized as a receivable because it does not involve amounts owed to the company.