Final answer:
Accounts Receivable includes monies customers owe from sales of merchandise or services provided but have not yet paid for, as well as interest receivable. Loans made to customers or employees are considered as note or loan receivables, which are distinct categories from Accounts Receivable. The value of a loan in the secondary market is influenced by factors like payment history, interest rates, and borrower profitability.
Step-by-step explanation:
Accounts Receivable typically refers to the money owed to a company for goods or services that have been delivered or used but not yet paid for by customers. In this context:
- Monies that customers owe us from sale of merchandise are classified as Accounts Receivable.
- Monies that customers owe us from providing a service are classified as Accounts Receivable.
- Tax refunds owed to us by the IRS are not Accounts Receivable, but rather Other Receivables.
- Interest Receivable is often considered a separate category under receivables, similar to Accounts Receivable.
- Loans we made to a customer can be considered a note receivable or loan receivable, different from traditional Accounts Receivable.
- Loans we made to an employee are similarly a note or loan receivable, not Accounts Receivable.
To further clarify, assets on a bank's balance sheet may include loans made to customers, which are legally binding agreements for the borrowers to repay the bank over time. In the secondary loan market, the value of these loans is based on what other parties are willing to pay for them, which can be influenced by factors such as borrower's payment history, current economic interest rates, and the borrower's financial health.