A. What is an account receivable? What other names does it go by?
Accounts receivable are amounts owed by customers on account. They result from the sale of goods and services on credit. These receivables are generally expected to be collected within 30 to 60 days. They are typically the most significant type of claim held by a company. Accounts receivable and notes receivable resulting from sales are also known as trade receivables. Accounts receivable resulting from sales are referred to as trade receivables in Alcatel's financial statements.
B. How do accounts receivable differ from notes receivable?
Notes receivable represent claims for which formal instruments of credit are issued as evidence of debt. A credit instrument normally requires a debtor to pay interest and extends for time periods of 60 to 90 days or longer. Notes receivable differ from accounts receivable due to the fact that notes receivable are secured by promissory notes and not through accounts.......
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