Notes receivable
Hey kiddo! Do you know when you borrow something from a friend and they promise to pay you back later? That's kind of like what a note receivable is.
A note is a fancy word for a written promise, and receivable just means something you're supposed to receive. So notes receivable are just promises to receive money at a future date.
Let's say your mom's friend wants to borrow some money to start a lemonade stand. They write a note promising to pay back the money in a month with interest. Your mom keeps that note and waits until the month is over.
When the month is up and your mom's friend brings back the money, that's when the note receivable turns into cash. Just like magic!
So the note receivable is basically a piece of paper that shows someone owes you money, and you expect to get that money back according to the agreement written on the note.
A note is a fancy word for a written promise, and receivable just means something you're supposed to receive. So notes receivable are just promises to receive money at a future date.
Let's say your mom's friend wants to borrow some money to start a lemonade stand. They write a note promising to pay back the money in a month with interest. Your mom keeps that note and waits until the month is over.
When the month is up and your mom's friend brings back the money, that's when the note receivable turns into cash. Just like magic!
So the note receivable is basically a piece of paper that shows someone owes you money, and you expect to get that money back according to the agreement written on the note.