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

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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

A formal credit arrangement between a creditor and debtor is called a(n):

Account receivable

Accrued expense

Note payable

Prepaid expense

Previous problemNext problem

Verified step by step guidance

Understand the concept of a formal credit arrangement: A formal credit arrangement is a documented agreement between a creditor (lender) and a debtor (borrower) that specifies the terms of repayment, including the amount borrowed, interest rate, and repayment schedule.

Review the definitions of the given options: Account receivable refers to money owed to a company by its customers for goods or services provided on credit. Accrued expense refers to expenses that have been incurred but not yet paid. Prepaid expense refers to payments made in advance for goods or services to be received in the future. Note payable refers to a formal written promise to pay a specific amount of money at a future date, often including interest.

Identify the key characteristics of a note payable: A note payable is a formal credit arrangement that is documented in writing, often involving a promissory note. It is a liability for the debtor and an asset for the creditor.

Compare the options to the definition of a formal credit arrangement: Among the options provided, only 'Note payable' matches the description of a formal credit arrangement between a creditor and debtor.

Conclude that the correct answer is 'Note payable' based on the definitions and comparison of the options provided.