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 is the most likely reason a lender would deny Tonya's credit application, considering the types of receivables?

Tonya only accepts cash payments and does not have any receivables.

Tonya has a history of uncollectible accounts receivable, indicating poor creditworthiness.

Tonya has a large balance in notes receivable, which always guarantees loan approval.

Tonya's accounts receivable are all current and have never been overdue.

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Verified step by step guidance

Understand the context of the problem: The question is asking about the reasons a lender might deny Tonya's credit application, focusing on the types of receivables and their implications for creditworthiness.

Analyze the options provided: Each option describes a different scenario related to Tonya's receivables, such as cash payments, uncollectible accounts, notes receivable, and current accounts receivable.

Evaluate the implications of each option: For example, a history of uncollectible accounts receivable suggests poor creditworthiness, which is a red flag for lenders. On the other hand, current accounts receivable that have never been overdue indicate good credit management.

Consider the role of notes receivable: While notes receivable can be a positive indicator, they do not always guarantee loan approval. Lenders assess multiple factors, including the borrower's overall financial health and history.

Determine the most likely reason for denial: Based on the analysis, the option that highlights a history of uncollectible accounts receivable is the most plausible reason for denial, as it directly reflects poor creditworthiness, which is a critical factor for lenders.