If a Bank Does Not Dishonor an "On-Us" Item by the Opening

question 58

True/False

If a bank does not dishonor an "on-us" item by the opening of the second banking day following its receipt, the check is considered paid.

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Definitions:

Contra Asset Account

An account on a company's balance sheet representing deductions from the gross amount of an asset, such as accumulated depreciation on fixed assets.

Allowance for Doubtful Accounts

An accounting method used to estimate the portion of a company's receivables that may not be collected, reducing the accounts receivable balance accordingly.

Uncollectible Accounts

Uncollectible accounts are receivables that a company deems uncollectable and likely will not be recovered, often written off as a bad debt expense.

Percent of Sales Method

A financial forecasting approach in which accounts are projected to increase as a percentage of the projected sales level.