Provide an explanation for each of the follow asset accounts

Provide an explanation for each of the follow asset accounts.

Account Name Explanation
Accounts Receivable

Prepaid Expense

Notes Receivable

What will be an ideal response

ANSWER

Account Name Explanation
Accounts Receivable A customer’s promise to pay in the future for services or goods sold. Often described as “On Account.”
Prepaid Expense A payment of an expense in advance. It is considered an asset because the prepayment provides a benefit in the future.
Notes Receivable A written promise that a customer will pay a fixed amount of money and interest by a certain date in the future. Often more formal than an Accounts Receivable.