What are Receivables? Explain the terms Trade and Non Trade Receivables

RECEIVABLES

Receivable are all amounts OWED to a company that are expected to be settled in cash.

Receivables can be classified as either trade or non trade receivables.

TRADE RECEIVABLES

• Mostly accounts or notes receivable.
• Trade receivables are the most common type of receivable reported in the balance sheet and usually represent the largest dollar amount.

NON TRADE RECEIVABLES

• Either current or non current.
• Examples of non trade receivables are accounts or notes receivable arising from the following types of transaction:
• Claims for losses or damages
• Claims for tax refunds
• Dividends or interest receivable
• Advances to employee
• Sales of property other than inventory
• Deposits with creditors or utilities