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Concept explainers
Accounts receivable
Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.
Note receivable:
Note receivable refers to a written promise by the debtor for the amounts to be received within a stipulated period of time. This written promise is issued by a debtor or borrower to the lender or creditor. Notes receivable is an asset of a business.
To describe: The advantages of promissory note, and compare it with the advantages of accounts receivable.
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Chapter 8 Solutions
Financial Accounting: Tools For Business Decisionmaking, Eighth Edition Wileyplus Blackboard Card
- "In accounts receivable management, credit analysis is the process of determining the probability that customers will not pay."arrow_forwardWhich of the following will increase the balance of accounts receivable? Group of answer choices Note discounted was dishonored by issuer at due date. Receipts of notes receivable as settlement of outstanding customer account. Sale of goods for cash. Collection of outstanding receivables.arrow_forwardWhen referring to a note receivable or promissory note a.the note cannot be factored to another party b.the note may be used to settle an account receivable c.the note is not considered a formal credit instrument d.the maker is the party to whom the money is duearrow_forward
- Why is it important to review your checking account statement? What fees might this help you avoid?arrow_forwardGive an explanation - and use an example - of why we may need to convert an Account Receivable to a Note Receivable and why we need to keep track of the days of the notes.arrow_forwardA note receivable is dishonoured when it is not paid in the allotted time period. Select one: O True False ہے.arrow_forward
- Dishonoring a note means the maker no longer has to pay. True or False?arrow_forwardThe notes payable is incorrect. How do I fix this?arrow_forwardWhen a customer is delinquent on paying a notes receivable, your company has the option to continue to attempt collection or sell the debt to a collection agency. Research the benefits and challenges with each of these options and in a short essay, answer the following questions. Required part B What are the benefits and challenges of continuing to attempt collection yourself? What are the benefits and challenges of selling debt to a collection agency? If you had a dishonored notes receivable, which option would you select and why? Would you weight certain benefits or challenges differently when making your selection? How?arrow_forward
- Which of the following credit checks would be considered a soft check? A. Vehicle loan application B. job application C. student loan application D. Credit card application I don't need explanation just the answer :)arrow_forwardWhen a customer is delinquent on paying a notes receivable, your company has the option to continue to attempt collection or sell the debt to a collection agency. Research the benefits and challenges with each of these options and in a short essay, answer the following questions. A. What are the benefits and challenges of continuing to attempt collection yourself? B. What are the benefits and challenges of selling debt to a collection agency? C. If you had a dishonored notes receivable, which option would you select and why? D. Would you weight certain benefits or challenges differently when making your selection? How?arrow_forwardExplain why a loan officer always looks at a credit report before making a loan. What should you do if your credit report is not accurate?arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College