Notes receivable ________.
A) represent an oral promise to pay a fixed amount of principal plus interest on the maturity date
B) are included in a miscellaneous category called other receivables
C) due within 12 months or within the normal operating cycle if the cycle is longer than a year are considered long-term assets
D) are supported by a promissory note

Question

Quizplus · Accepted Answer

Notes receivable are supported by a promissory note, which is a legal document that outlines the terms of repayment, including the principal amount and interest rate, as well as the maturity date. This distinguishes them from accounts receivable, which are typically oral or implied promises to pay for goods or services, without a written agreement. Additionally, notes that are due within one year, or within the company's normal operating cycle if longer than a year, are considered current assets, while those with longer terms are classified as long-term.

Notes Receivable ________