Which of the following defines notes receivable?
A) Stocks and bonds that a business may hold in the hope that they would provide a greater return to the business rather than just letting cash "sit" in a bank account.
B) The amount of money due to a business from prior credit sales.
C) A formal debt instrument that will be paid to the company within a year.
D) An accrual accounting term that represents payments made in advance of their actual occurrence.
E) Tangible goods held by a business for the production of goods and services.

Question

Quizplus · Accepted Answer

Notes receivable are formal debt instruments that outline the terms and conditions of a loan or credit sale to a customer. They are typically paid off within a year and represent a future cash inflow for the business.

Which of the Following Defines Notes Receivable