Notes Receivable That Are Paid in Installments Are Classified on the Balance

question 106

Multiple Choice

Notes receivable that are paid in installments are classified on the balance sheet.

• A)as a current asset if the amount is to be collected in the current period, and the remainder is a long- term asset
• B)always as long- term assets
• C)always as current assets
• D)as current assets if the final payment will be made in the current period

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Definitions:

Special Journal

A financial journal designed for recording a specific type of transaction, helping in streamlining and categorizing financial entries.

Cash Receipts Journal

An accounting journal used to record all receipts of cash, including sales made for cash and payments received from debtors.

Accounts Receivable Journal

A ledger used to record sales transactions where payment is to be received in the future, detailing each customer’s purchase on credit.

Purchases Journal

A specialized accounting journal used to record the purchasing of goods and services on credit.