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Differentiate between Accounts receivable and Notes receivable.

Differentiate between Accounts receivable and Notes receivable.
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Answer #1

Differentiate between Accounts receivable and Notes receivable.

Accounts receivable Selling goods on account
Notes receivable Lending money in exchange for a promissory note.

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S No. Accounts receivable Notes receivable
1 Financial claim between the buyer and seller. Legal agreement between borrower and creditor.
2 Short-term claim. Long-term deed.
3 No interest on the principal amount. Fixed-rate of interest on the principal amount.
4 No legal evidence is present for accounts receivables. Legal deed is the evidence for notes receivables.

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