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 types of receivables contains the company's formal promise to pay a specific amount at a future date?

Accounts Receivable

Interest Receivable

Notes Receivable

Advances to Employees

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Verified step by step guidance

Understand the concept of receivables: Receivables are amounts owed to a company by its customers or other parties. They are classified based on the nature of the agreement and the type of payment expected.

Review the definition of Notes Receivable: Notes Receivable represents a formal written promise from a debtor to pay a specific amount of money at a future date, often including interest. This is typically documented in a promissory note.

Compare Notes Receivable with other types of receivables: Accounts Receivable refers to amounts owed by customers for goods or services provided on credit, without a formal written agreement. Interest Receivable is the interest income earned but not yet received. Advances to Employees are payments made to employees that are expected to be repaid or settled later.

Identify the key characteristic of Notes Receivable: The distinguishing feature is the formal written promise, which sets it apart from other receivables that may not involve such documentation.

Conclude that Notes Receivable is the correct answer: Based on the formal promise to pay a specific amount at a future date, Notes Receivable is the type of receivable that matches the description provided in the problem.