Usually, an IOU is a signed informal notice of an unpaid debt, sometimes because of partial payment and an outstanding balance due. For example, Company XYZ may buy raw materials for its production but until it sells the finished product, it does not have sufficient cash flow to pay for the raw materials in full .
Read moreIs IOU A cash?
Cash equivalents include all undeposited negotiable instruments (such as checks), bank drafts, money orders and certain certificates of deposit. IOUs and notes receivable are not included in cash .
Read more