Which of the following statements is true? A. Notes receivable usually have longer collection terms than accounts receivable. B. Accounts receivable are liabilities. C. Accounts receivable are more liquid than cash. D. Notes receivable are always classified as current assets.

The correct answer is option A.

Explanation:

Account receivable and notes receivable are types of trade receivables. Both accounts and notes receivable are mentioned as assets in the balance sheets.

Accounts receivable represents the amount that the customers owe to the company for normal purchases. They are current assets.

Notes receivable shows the amount owed by those customers who have signed promissory notes to acknowledge their debts.

Notes receivable have longer collection terms as compared to the accounts receivable.