Receivables
Amounts due from individuals and companies that are expected to be collected in cash.
Accounts Receivable
Amounts customers owe on account. Companies generally expect to collect accounts receivable within 30 to 60 days. They are usually the most significant type of claim held by a company.
Notes Receivable
Claims for which formal instruments of credit are issued as evidence of the debt.The credit instrument normally requires the debtor to pay interest and extends for time periods of 60�90 days or longer.
Trade Receivables
Notes and accounts receivable that result from sales transactions.
Other Receivables
Other receivables include non-trade receivables such as interest receivable, loans to company officers, advances to employees, and income taxes refundable. These do not generally result from the operations of the business. Therefore, they are generally classified and reported as separate items in the balance sheet.
Allowance Method
A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period.
(Notes Receivable) Promissory Notes
A written promise to pay a specified amount of money on demand or at a definite time.Promissory notes may be used (1) when individuals and companies lend or borrow money, (2) when the amount of the transaction and the credit period exceed normal limits, and (3) in settlement of accounts receivable.