Question

Defining common receivables terms

Match the terms with their correct definition.

Terms Definitions

1. Accounts receivable	a. The party to a credit transaction who takes on an obligation/payable.
2. Other receivables	b. The party who receives a receivable and will collect cash in the future.
3. Debtor	c. A written promise to pay a specified amount of money at a particular future date.
4. Notes receivable	d. The date when the note receivable is due.
5. Maturity date	e. A miscellaneous category that includes any other type of receivable where there is a right to receive cash in the future
6. Creditor	f. The right to receive cash in the future from customers for goods sold or for services performed.

Short answer

1-f

2-e

3-b

4-c

5-d

6-a

Step-by-step solution

Definition of accounts receivable

The accounts receivable means the amount that the company is receiving. This amount is received from the debtors of the company.

Matching the correct definition

1. Accounts receivable: Option f is correct as this indeed provides the right to the firm to obtain cash from the service taker against the services given in the past.
2. Other receivables: option e is correct as it includes various amounts to be received where the company has the right.
3. Debtor: Option b is correct as this explains the individual that gets the money and needs to pay it back in the future.
4. Notes receivable: Option c is related as it generates an agreement to provide a particular amount on a future date.
5. Maturity date: Option d. is correct as this specified the maturity date.
6. Creditor: Option a is correct as this is the individual who provides the fund and is responsible.