ACG-2021 Chapter Notes - Chapter 8: Promissory Note, Interest Rate, Accounts Receivable
Document Summary
Types of receivables: the term receivables refers to amounts due from individuals and companies, receivables. Claims that are expected to be collected in cash. Important because they represent one of a company"s most liquid assets: accounts receivable. Result from the sale of goods and services. Companies generally expect to collect within 30 to 60 days. Usually most significant type of claim held by a company: notes receivable. Written promise for amounts to be received. Normally requires collection of interest and extends for time periods of. Include nontrade receivables such as interest receivable, loans to company officers, advances to employees, and income taxes refundable. Do not generally result from the operations of the business: two accounting issues associated with accounts receivable are, recognizing accounts receivable, valuing accounts receivable. Recognizing accounts receivable: a service organization records a receivable when it performs service on account, a merchandiser records accounts receivable at the point of sale of merchandise on account.
