Explain the Requirement for a Holder in Due Course (HDC)

question 41

Essay

Explain the requirement for a holder in due course (HDC) under the Uniform Commercial Code (UCC) that there be no evidence of forgery, alteration, or irregularity with respect to a negotiable instrument.

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Definitions:

Debit Balance

Occurs when the total of debits in an account exceeds the total of credits, which can be typical for accounts like expenses, assets, and losses.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of a company's accounts receivable that may not be collectible.

Allowance for Doubtful Accounts

A contra-asset account that represents the estimated portion of accounts receivable that may not be collectible.

Uncollectible Receivables

Amounts due from customers that are considered unlikely to be collected and are written off as a loss.