What is the difference between accounts receivable and notes receivable?
Accounts receivable are the expected future receipts that arise when a company permits its customers to buy now and pay later. The amounts are usually small with a short term to maturity.
Notes Receivable have longer terms to maturity and are usually for larger amounts. The note specifies the maturity date, interest rate, and other credit terms.
More Questions Accounting Chapter 5:
- What is the difference between the flow of costs and the physical flow of goods?
- In an inflationary period, which inventory cost flow method will produce the largest amount of total assets on the balance sheet? Explain.
- In an inflationary period, which inventory cost flow method will produce the highest net income? Explain.
- What are some advantages and disadvantages of using the FIFO method of inventory valuation?
- What are some advantages and disadvantages of the specific identification method of accounting for inventory?
- What is the effect on the accounting equation of recognizing uncollectable accounts expense?
- What is the net realizable value of receivables?
- What is the difference between accounts receivable and notes receivable?