Learn the Definition of Other receivables

In a nutshell, a receivable is money that you have collected or will collect from a customer, but that you are unable to use at this time. For example, you collect $2,500 on your customers’ account receivable balance. A month later, your customers give you another $2,500 on the same account, and you immediately deposit the $5,000 in your bank account. At this point you can use the $5,000, but your company has an account receivable balance of $3,000. How do you get that remaining $2,500? You can call on your customers and negotiate a payment or try to collect it from them. There are three main ways to collect money from a customer: by

While we’re all familiar with the terms “account receivable,” “account payable,” and “accounts payable,” there’s another term that we don’t always understand: “other receivables.”

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Sep 4, 2020
Bookkeeping by Adam Hill

If your customers owe debts that have promissory notes attached, you record the debts under notes receivable. This goes on the balance sheet separately from accounts receivable, though it still counts as an asset. You offer three months extra time to pay, in return for a promissory note, and the customer agrees.

Note Receivable – represents a written promise that the customer will pay a fixed amount of principal plus interest by a certain date in the future. Other Receivables – a miscellaneous category that includes any other type of receivables where there is a right to receive cash in the future. Accounts receivable (AR) is the balance of money due to a firm for goods or services delivered or used but not yet paid for by customers.

Customers frequently sign promissory notes to settle overdue accounts receivable balances. Brown signs a six‐month, 10%, $2,500 promissory note after falling 90 days past due on her account, the business records the event by debiting notes receivable for $2,500 and crediting accounts receivable from D. Notice that the entry does not include interest revenue, which is not recorded until it is earned. Booking a receivable is accomplished by a simple accounting transaction. However, the process of maintaining and collecting payments on the accounts receivable is more complex.

Companies record accounts receivable as assets on their balance sheets since there is a legal obligation for the customer to pay the debt. Furthermore, accounts receivable are current assets, meaning the account balance is due from the debtor in one year or less. If a company has receivables, this means it has made a sale on credit but has yet to collect the money from the purchaser. Essentially, the company has accepted a short-term IOU from its client. Accounts receivable refers to the outstanding invoices a company has or the money clients owe the company.

One Response to Notes Receivable

Accounts receivable usually appear on balance sheets below short-term investments and above inventory. Receivables can be classified as accounts receivables, notes receivable and other receivables ( loans, settlement amounts due for non- current asset sales, rent receivable, term deposits). Other receivables can be divided according to whether they are expected to be received within the current accounting period or 12 months (current receivables), or received greater than 12 months ( non-current receivables). 1) a receivable is a monetary claim against a business or an individual. Accounts Receivable – represents to receive cash in the future from customers for goods sold or for service performed.{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”What is the meaning of other receivables?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” Other receivables are the amount of money that a company has received from customers but not yet paid out.”}},{“@type”:”Question”,”name”:”What are other current receivables?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” Other current receivables are those that are due within one year.”}},{“@type”:”Question”,”name”:”What are the trade and other receivables?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” Trade receivables are the money owed to a company by its customers. Other receivables are money owed to a company by suppliers or other companies.”}}]}

Frequently Asked Questions

What is the meaning of other receivables?

Other receivables are the amount of money that a company has received from customers but not yet paid out.

What are other current receivables?

Other current receivables are those that are due within one year.

What are the trade and other receivables?

Trade receivables are the money owed to a company by its customers. Other receivables are money owed to a company by suppliers or other companies.