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 classified as a type of receivable on a company's balance sheet?

Accounts Receivable

Accounts Payable

Inventory

Prepaid Expenses

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Verified step by step guidance

Step 1: Understand the concept of receivables. Receivables are amounts owed to a company by customers or other parties, typically resulting from credit sales or other transactions. They are classified as assets on the balance sheet because they represent future economic benefits.

Step 2: Analyze the options provided in the question. The options are: Accounts Receivable, Accounts Payable, Inventory, and Prepaid Expenses. Determine which of these represents an amount owed to the company.

Step 3: Evaluate each option: - Accounts Receivable: This represents amounts owed to the company by customers for credit sales, making it a type of receivable. - Accounts Payable: This represents amounts the company owes to suppliers, which is a liability, not a receivable. - Inventory: This represents goods held for sale, which is an asset but not a receivable. - Prepaid Expenses: These are payments made in advance for future expenses, which are assets but not receivables.

Step 4: Identify the correct classification. Based on the analysis, Accounts Receivable is the only option that qualifies as a type of receivable on the company's balance sheet.

Step 5: Conclude that Accounts Receivable is classified as a type of receivable because it represents amounts owed to the company by customers, aligning with the definition of receivables.