Asked by Paige Gratton on Jul 05, 2024
Verified
Your roommate is uncertain about the advantages of a promissory note. Compare the advantages of a note receivable with those of an account receivable.
Account Receivable
Deferred payments from customers for the delivery or use of goods or services by a company.
Note Receivable
A financial asset representing a promise for future receipt of cash, typically arising from sales or loans, evidenced by a written promise to pay.
- Analyze the monetary gains derived from the employment of promissory notes instead of accounts receivable.
Verified Answer
KJ
Koundinya JajamJul 09, 2024
Final Answer :
A promissory note gives the holder a stronger legal claim than one on an accounts receivable. As a result, it is easier to sell to another party. Promissory notes are negotiable instruments, which means they can be transferred to another party by endorsement. The holder of a promissory note also can earn interest
Learning Objectives
- Analyze the monetary gains derived from the employment of promissory notes instead of accounts receivable.