Final answer:
Short-term notes receivable are recorded at face value on the balance sheet, the same as cash and coins and currency in circulation. The balance sheet is a fundamental financial statement that lists a company's assets and liabilities, including bank capital, a reflection of a bank's net worth.
Step-by-step explanation:
Like cash, short-term notes receivable are recorded and reported at face value. The same is true for coins and currency in circulation.
In the context of accounting, especially when dealing with the balance sheet, assets such as short-term notes receivable and cash, including coins and currency that are in circulation, are valued at the amount they can be exchanged or paid at currently, without any adjustment for interest or future value.
This is in contrast with assets like buildings or equipment, which may be valued at historical cost minus depreciation. The balance sheet is a critical accounting tool that lists a company's assets and liabilities. Understanding how to record and report various assets, like short-term notes receivable, is essential for accurate financial reporting.
Another example of an item found on a balance sheet is bank capital, which represents a bank's net worth. This capital is critical for banks due to the asset-liability time mismatch issue: customers can demand their deposits (liabilities of the bank) in the short term, while the bank's loan repayments from borrowers (assets) typically happen over a longer period.