Section 4
Notes Receivable
Book
Version 3
By Boundless
By Boundless
Boundless Accounting
Accounting
by Boundless
4 concepts
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Components of a Note
Notes Receivable represents claims for which formal instruments of credit are issued as evidence of debt, such as a promissory note.
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Recognizing Notes Receivable
In accounting, notes receivables are accounts to keep track of accrued assets that have been earned but not yet received.
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Valuing Notes Receivable
Companies have two methods available to them for measuring the net value of accounts receivable: the allowance method and the direct write-off method.
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Write-Offs
Companies use two methods for handling uncollectible accounts: the allowance method and the direct write-off method.