Final answer:
Receivables are financial assets on a company's balance sheet and include accounts receivable, notes receivable, and interest receivable. Banks often don't hold all listed assets in cash as they are engaged in lending and investing activities. The value of secondary market loans varies with payment reliability and interest rate shifts.
Step-by-step explanation:
Receivables, including accounts receivable, notes receivable, and interest receivable, fall under the category of financial assets on a company's balance sheet. These are amounts due to the company from customers or other entities and are expected to be paid in the short-term, hence they are considered current assets. Receivables are essential for managing a company's cash flow and are reflected on the T-account, where they are part of the assets on the left side.
Money listed as assets on a bank's balance sheet, such as loans or government securities, may not actually be physically present in the bank. This is because banks use the funds from deposits to issue loans and buy bonds, which are regarded as assets because they are expected to bring a stream of payments in the future. This is aligned with the fractional reserve banking system, which allows banks to lend out a large portion of the deposits they receive while maintaining only a fraction in actual reserves.
In the secondary market, the value paid for loans will vary based on factors such as the borrower's payment history and changes in interest rates. For instance, a loan might attract a lower price if the borrower has been late on loan payments due to increased risk. Conversely, if interest rates have fallen since the loan was issued, a loan might fetch a higher price due to its relatively higher interest payments compared to new loans.