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The last topic under the receivables chapter focuses on promissory notes, which are categorized as notes receivable. Unlike accounts receivable, which are unsecured rights to receive cash, notes receivable are secured rights evidenced by a formal written document known as a promissory note. A promissory note is a formal promise to pay a specific sum of money at a future date, commonly used in credit sales. Key terms related to promissory notes include the maker (the party promising to pay) and the payee (the party receiving the payment). Understanding these concepts is essential for managing notes receivable effectively.