On December 31 you have a 11000 note receivable from a custo

On December 31, you have a $11,000 note receivable from a customer. Interest of 8 percent has also accrued for seven months on the note. What will your financial statements O A. The balance sheet will report the note receivable of $11,000 B. The income statement vil report a note receivable of $11,000. O C. Nothing will be reported because you haven\'t received the cash yet O D. The balance sheet will report the note receivable of $11,000 and interest recevable of $513

Solution

Correct answer is option (D)

Note receivable and interest accrues on that, both are assets of the business and hence both of these will be recorded in the balance sheet.

Income statement contains incomes and expenses only. Assets are not shown in the income statement. Hence , note receiveable cannot be shown in the Income statement.

Note receivable and interest accrued on that , both are assets of the business and hence both of these will be recorded in the balance sheet even if no cash has been received against them.

Hence correct option is (D)