Interest Receivable
This is interest that has been earned but not yet received.
What is interest receivable?
This is a formal written promise to pay.
What is a note receivable?
This is the total amount collected at maturity.
What is maturity value?
This type of receivable is informal and short-term.
What is accounts receivable?
This happens when a customer signs a note to replace an unpaid account.
What is converting A/R to N/R?
This accounting method requires revenue to be recorded when earned, not when cash is received.
What is accrual accounting?
These are the three components of a note receivable.
What are principal, interest rate, and maturity date?
This formula calculates interest on a note.
What is Principal × Rate × Time?
This type of receivable always includes interest and is long-term.
What is notes receivable?
This occurs when the borrower pays the full amount on time.
What is honouring a note?
In recording interest receivable, this account is credited.
What is interest revenue?
This account is credited when a note is created from lending cash.
What is cash?
This occurs when a note is sold to a bank before maturity.
What is discounting a note?
This is the typical time frame for accounts receivable.
What is about 30 days?
This occurs when the borrower fails to pay at maturity.
What is a dishonoured note?
This financial statement shows interest receivable as an asset.
What is the balance sheet?
This type of asset is a note receivable classified as.
What is a financial asset?
This is the interest the bank charges when discounting a note.
What is a bank discount?
What is a bank discount?
This is the key difference between A/R and N/R.
What is formality and time?
When a note is dishonoured, it is transferred into this account.
What is accounts receivable?
This is the journal entry when recording earned but uncollected interest.
What is Debit Interest Receivable, Credit Interest Revenue?
This situation describes when a note is issued instead of collecting an accounts receivable.
What is conversion of A/R to N/R?
This is the formula used to calculate proceeds from a discounted note.
What is Maturity Value − Bank Discount?
Both A/R and N/R are measured using this valuation concept.
What is net realizable value?
This is the full journal entry effect when a note is honoured and interest was partially recorded earlier.
What is
Debit Cash; Credit Notes Receivable, Interest Receivable, and Interest Revenue?