Question

Which of the following is NOT a difference we discussed between accounts and notes receivable?

		Notes Receivable include interest.
		Notes Receivable are based on sales made.
		Notes Receivable are due on a specific date.
		Notes Receivable require a formal contract.

Answer 1

OPTION B IS CORRECT as NOTES RECIEVABLES are not necessarily based on sales but could be recieved against issuing loan to another organisation or from debtor who had bought goods or services from organisation. Organisation can recieve notes recievable from anyone during course of business not necessarily from sale of goods. While accounts recievable are baded on sales.

Option A is incorrect as notes recievable carry a fixed rate of interest to be paid with the amount.
Option C is incorrect as notes recievable are due on a fixed date they are to be paid before specified date as decided by parties formally.
Option D is incorrect as notes recievable is a formal contract and gives holder right to recieve the amount.