Question

notes receivable ______

a. are supported by a promissory note
b. that are due within 12 months or within the normal operating cycle if the cycle is longer than a year are considered long - term assets
c. represent an oral promise to pay a fixed amount of principal plus interest on the maturity date
d. are included in a miscellaneous category called other receivables

Explanation:

• Option A: Notes Receivable are indeed supported by a promissory note (a written promise to pay), which is correct.
• Option B: Notes Receivable due within 12 months or the operating cycle (if longer than a year) are current assets, not long - term assets, so B is wrong.
• Option C: Notes Receivable are based on a written, not oral, promise, so C is wrong.
• Option D: Notes Receivable are a distinct category, not part of "other receivables", so D is wrong.

Answer:

A. are supported by a promissory note