Multiple Choice
Which of the following is NOT considered a type of receivable in financial accounting?
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7. Receivables and Investments
Types of Receivables
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Which of the following is NOT considered a type of receivable in financial accounting?
A
Interest Receivable
B
Accounts Receivable
C
Accounts Payable
D
Notes Receivable
Verified step by step guidance1
Understand the concept of receivables: Receivables are amounts owed to a company by its customers or other parties. They are considered assets because they represent future cash inflows.
Identify the types of receivables: Common types of receivables include Accounts Receivable, Notes Receivable, and Interest Receivable. These are all amounts that the company expects to collect in the future.
Analyze the given options: Accounts Receivable refers to amounts owed by customers for goods or services provided on credit. Notes Receivable refers to written promises to pay a specific amount at a future date. Interest Receivable represents interest income earned but not yet received.
Understand why Accounts Payable is not a receivable: Accounts Payable represents amounts the company owes to suppliers or creditors. It is a liability, not an asset, and therefore not a type of receivable.
Conclude that Accounts Payable is the correct answer because it is a liability and does not fall under the category of receivables.
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