Notes Receivable Debit or Credit is an accounting concept used to define the transactions for loans, credit sales, and other forms of debt that have been issued by a company. This concept is based on the double-entry system of bookkeeping, which requires that two entries must be made into the system – one as a line item credit and one as a line item debit – in order to properly record the transaction. In the case of notes receivable, the debit entry is to recognize the loan amount received, while the credit entry is to indicate the money that will eventually be repaid. By tracking these entries, businesses can better assess their financial well-being and make informed financial decisions.