What is the purpose of using a note receivable instead of simply leaving the receivable account as-is? And is this used much in today's accounting world?
What is the purpose of using a note receivable instead of simply leaving the receivable account as-is? And is this used much in today's accounting world?
Notes receivable is a written commitment from a customer to pay at a given future date. They mainly arise when.. say you decide to give credit to a new customer with no known credit history, you will use the note to make the credit more enforceable.
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