Which of the following statements is true?
A)Accounts receivable are more liquid than cash.
B)Notes receivable are always classified as current assets.
C)Notes receivable usually have longer collection terms than accounts receivable.
D)Accounts receivable are liabilities.

Question

Quizplus · Accepted Answer

Notes receivable are usually for a longer period than accounts receivable. This is because notes receivable are a written promise to pay back an amount in full, with interest, while accounts receivable are typically due within a short time frame without interest. It is also worth noting that accounts receivable are an asset and notes receivable can be classified as either current or non-current depending on their terms of payment. Option A is not true because cash is the most liquid asset. Option B is not always true because notes receivable can be classified as either current or non-current depending on their terms of payment. Option D is incorrect because accounts receivable are assets, not liabilities.

Which of the Following Statements Is True