Asked by Khyla Singleton on May 12, 2024
Verified
Notes receivable due in 390 days appear on the
A) balance sheet in the current assets section
B) balance sheet in the noncurrent assets section
C) balance sheet in the current liabilities section
D) income statement as an expense
Notes Receivable
An asset on the balance sheet representing the right to receive payments from a debtor under the terms of a promissory note.
Noncurrent Assets
Long-term resources owned by a company, such as property, plant, equipment, and intangible assets, expected to provide value beyond the immediate fiscal year.
- Highlight the differentiation between liquid assets, tangible assets, short-term debts, and prolonged liabilities on the statement of financial position.
Verified Answer
AD
Alisa DayanaMay 17, 2024
Final Answer :
B
Explanation :
Notes receivable due in 390 days are considered a noncurrent asset because they will not be converted into cash within the current operating cycle of the business, which is typically one year. Therefore, they are reported on the balance sheet in the noncurrent assets section.
Learning Objectives
- Highlight the differentiation between liquid assets, tangible assets, short-term debts, and prolonged liabilities on the statement of financial position.