If the amount due on a note receivable is not collected at maturity,
A)the note is said to be dishonored.
B)Allowance for Doubtful Accounts should immediately be debited.
C)the face value of the note should continue to be carried in the Notes Receivable account until all possible means of collecting the note have been exhausted.
D)Uncollectible Accounts Expense should be debited.

Question

Quizplus · Accepted Answer

When the amount due on a note receivable is not collected at maturity, the note is said to be dishonored. This means that the debtor has not fulfilled their obligation to repay the loan according to the terms of the note. As a result, the creditor may need to pursue legal action or other means of collection in order to recover the debt. In this situation, the creditor should also record the dishonored note as a loss on their financial statements.

If the Amount Due on a Note Receivable Is Not