Final answer:
Accounts (trade) receivable are not formal promissory notes and generally do not include interest payments; they are amounts owed to a business from its customers. The statement is false.
Step-by-step explanation:
Accounts (trade) receivable are amounts due to a firm for goods delivered or services provided as part of its normal business operations. This is false when it comes to their characterization as formal promissory notes that often include interest payments. Instead, accounts receivable are usually informal agreements whereby clients or customers owe the firm money for products or services rendered and are expected to pay within a set period, generally without interest.
For businesses to borrow money, they may turn to banks and issue bonds. A strong financial history with significant revenues and profits can support a firm in making credible promises to pay interest on borrowed funds. Although accounts receivable could potentially be used as collateral in obtaining loans, they themselves do not typically involve formal agreements regarding interest payments unless they become overdue and are then subject to late payment charges or interest.