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Financial Terms | |
Notes receivable |
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Definition of Notes receivableNotes receivableAmounts owed to the company that have been formalized by a legal agreement called a note. NOTES RECEIVABLEnotes receivable are promissory notes that the company has accepted from its debtors. Most promissory notes pay interest. Those that are due within a year are shown under “Current Assets.” Those that mature in more than a year would be listed under “Long-term Assets.” If a note is being
Related Terms:ACID-TEST RATIOA ratio that shows how well a company could pay its current debts using only its most liquid or “quick” assets. It’s a more pessimistic—but also realistic—measure of safety than the current ratio, because it ignores sluggish, hard-toliquidate current assets like inventory and notes receivable. Here’s the formula: Accounts receivableMoney owed by customers. ACCOUNTS RECEIVABLEAmounts owed to a company by customers that it sold to on credit. Total accounts receivable are usually reduced by an allowance for doubtful accounts. Accounts receivableAmounts owed to the company, generally for sales that it has made. accounts receivableShort-term, non-interest-bearing debts owed to a Accounts receivableA current asset on the balance sheet, representing short-term ![]() Accounts ReceivableAmounts due from customers for sales on open account, not evidenced Accounts ReceivableMoney owed to a business for merchandise or services sold on open account. Accounts Receivable Days (A/R Days)The number of days it would take to collect the ending Accounts receivable turnoverThe ratio of net credit sales to average accounts receivable, a measure of how accounts receivable turnover ratioA ratio computed by dividing annual Average age of accounts receivableThe weighted-average age of all of the firm's outstanding invoices. Average collection period, or days' receivablesThe ratio of accounts receivables to sales, or the total BAN (Bank anticipation notes)notes issued by states and municipalities to obtain interim financing for Days in receivablesAverage collection period. ![]() Demand master notesShort-term securities that are repayable immediately upon the holder's demand. Discounting of Accounts ReceivableShort-term financing in which accounts receivable are used as collateral to secure a loan. The lender does not buy the accounts receivable but simply uses them as collateral for the loan. Also called pledging of accounts receivable. Documented discount notesCommercial paper backed by normal bank lines plus a letter of credit from a Extendable notesNote the maturity of which can be extended by mutual agreement of the issuer and Money market notesPublicly traded issues that may be collateralized by mortgages and MBSs. Municipal notesShort-term notes issued by municipalities in anticipation of tax receipts, proceeds from a Notes payableAmounts owed by the company that have been formalized by a legal document called a note. Notes to the financial statementsA detailed set of notes immediately following the financial statements in NUMBER OF DAYS SALES IN RECEIVABLES(also called average collection period). The number of days of net sales that are tied up in credit sales (accounts receivable) that haven’t been collected yet. Project notes (PNs)Project notes are issued by municipalities to finance federally sponsored programs in Receivables balance fractionsThe percentage of a month's sales that remain uncollected (and part of Receivables turnover ratioTotal operating revenues divided by average receivables. Used to measure how TANs (tax anticipation notes)Tax anticipation notes issued by states or municipalities to finance current Treasury notesDebt obligations of the U.S. Treasury that have maturities of more than 2 years but less than 10 years. Unbilled Accounts ReceivableRevenue recognized under the percentage-of-completion Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |