Question

Presented below are three receivables transactions. Indicate whether these receivables are reported as accounts receivable, notes receivable, or other receivables on a balance sheet.
-Sold merchandise on account for $64,000 to a customer.

-Received a promissory note of $57,000 for services performed.

-Advanced $10,000 to an employee.

Answer 1

Answer:

1. Accounts receivable

2. Notes receivable

3. Other receivable

Explanation:

Sold merchandise on account for $64,000 to a customer - Accounts receivable. Since the merchandise is sold on credit to a customer, the same is recorded in the current assets of the balance sheet as accounts receivable.

Received a promissory note of $57,000 for services performed - Notes receivable. Since the promissory note is received for service performed which we term as a note receivable. This also come under the current assets of the balance sheet

Advanced $10,000 to an employee - Other receivables - As an advance is given to an employee neither is an account receivable nor it notes receivable. So, it is term as an other receivable