Chapter 8, Problem 8.12E

To determine

Receivables

Receivables refer to an amount to be received in future. General classifications of receivables are accounts receivable, note receivable, and other receivables.

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.

Other receivables

Other receivables such as interest receivables, loan to company officers, advances to employees, income taxes refundable are non-trade receivables as these are not resulted from sales transaction or business operations.

To prepare: A balance sheet presentation of receivables.