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

Firms may secure a short-term loan by using _______ as collateral.

retained earnings

prepaid expenses

accounts receivable

goodwill

Previous problemNext problem

Verified step by step guidance

Understand the concept of collateral: Collateral is an asset that a borrower offers to a lender to secure a loan. If the borrower fails to repay the loan, the lender can seize the collateral to recover the loan amount.

Identify the nature of accounts receivable: Accounts receivable represent amounts owed to a firm by its customers for goods or services provided on credit. These are considered current assets and are often used as collateral for short-term loans.

Evaluate why retained earnings cannot be used as collateral: Retained earnings are part of equity and represent accumulated profits. They are not tangible assets and cannot be pledged as collateral.

Assess why prepaid expenses cannot be used as collateral: Prepaid expenses are payments made in advance for goods or services. They are not liquid or easily convertible to cash, making them unsuitable as collateral.

Understand why goodwill cannot be used as collateral: Goodwill is an intangible asset that represents the value of a firm's reputation or brand. It is not a physical or liquid asset, so it cannot be pledged as collateral for loans.