The Journal Entry to Write Off an Uncollectible Account Does

question 132

True/False

The journal entry to write off an uncollectible account does not change the net realizable value (book value)of accounts receivable.

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Definitions:

Transferor

An individual or entity that transfers rights, ownership, or interests in assets to another party.

HDC (Holder in Due Course)

A legal term referring to someone who has acquired a negotiable instrument in good faith for value and without notice of any defect.

Defective Instrument

A legal or financial document that contains errors, omissions, or flaws rendering it invalid or ineffective.

Dishonor

To refuse to accept or pay a draft or a promissory note when it is properly presented. An instrument is dishonored when presentment is properly made and acceptance or payment is refused or cannot be obtained within the prescribed time.