Final answer:
The receivable that is usually evidenced by a formal instrument of credit is a note receivable.
Step-by-step explanation:
The receivable that is usually evidenced by a formal instrument of credit is a note receivable.
A note receivable is a written promise to pay a specified amount of money at a specified time, and it is typically supported by a formal instrument of credit, such as a promissory note. This instrument outlines the terms of the loan, including the interest rate, repayment schedule, and any collateral.
For example, if a company loans money to a customer and obtains a promissory note as evidence of the debt, that debt would be classified as a note receivable.