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agreement, however, did not define what items constituted
accounts receivable or otherwise indicate whether the loans to
shareholder accounts were included or excluded. Petitioners
contend that the term “accounts receivable” includes loans to
shareholders. We, however, find the meaning unclear.
Black’s Law Dictionary (7th ed. 1999) defines the term
“account receivable” to mean “An account reflecting a balance
owed by a debtor; a debt owed by a customer to an enterprise for
goods or services.” Kohler’s Dictionary for Accountants (6th ed.
1983) further defines the term to mean “A claim against a debtor,
generally on open account, its application usually limited to
uncollected amounts of completed sale of goods and services;
distinguished from deposits, accruals, and other items not
arising out of everyday transactions.” (Emphasis added.) One
accounting textbook explains that
The term “receivables” refers to amounts due from
individuals and other companies. Receivables are
claims that are expected to be collected in cash.
Receivables are frequently classified as (1) accounts,
(2) notes, and (3) other.
Accounts receivable are amounts owed by customers
on account. They result from the sale of goods and
services. * * *
* * * * * * *
Other receivables include nontrade receivables
such as interest receivable, loans to company officers,
advances to employees, and income taxes refundable.
These are unusual; therefore, they are generally
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