Notes receivable are sometimes called promissory no

All notes receivable are considered long - term asset

Notes receivable usually have longer terms than accounts receiv

A notes receivable is a written promise that a customer will pay a fixed amount of principal plus interest by a certain date in the future

allowing credit department employees to collect cash from customers

separa ting cash collection and credit approval duti

combining the duties of the credit and accounting departments

extending credit to all customers who apply for credit

receives cash, less an applicable fee, after the factor collects from the customers

no longer has to deal with the collection of the receivables from the customers

receives the the total amount of the receivables from the factor

uses the receivables as security for a loan

credit to Accounts Receivable and a debit to Interes t Expense

debit to Accounts Receivable and a credit to Cash

debit to the Allowance for Bad Debts and a credit to Accounts Receivable

credit to Accounts Receivable and a debit to Bad Debts Expense

$75,000

$59,000

$10,286

$24,889

It is only suitable for small companies that have very few uncollectible receivables.

GAAP requires public companies to follow the direct write off method

It results in more accurate net income than any other method.

It provides better matching of revenues with expenses.

the Bad Debts Expense account is debited when an account is written off

the Allowance for Bad Debts account balance is added t o the balance of the Accounts Receivable account to arrive at the net realizable value

the Allowance for Bad Debts account is debited when the bad debts expense is estimated

the amount of bad debts expense is estimated at the end of the accounting period

it is shown as a contra account related to accounts receivab

It is reported as a separate, independent line item under current as

It is reported as a current liability

It is reported as an operating expense

$28,500; $26,400

$26,400; $30,60

$26,400; $26,400

$28,500; $28,50

$18,080

$16,347

$15,653

$16,000

$551,200

$533,485

$533,533

$530,000

$52,000

$57,000

$50,000

$51,750

principal amount times the interest rate

princi pal amount plus interest due at maturity

face amount of the note

principal amount minus interest due at maturity

$14,700

$1,633

$4,899

$19,600

a discounted note

an amortized note

a depreciated note

a dishonored note