Dishonor of an Instrument Involves Which of the Following

question 11

Multiple Choice

Dishonor of an instrument involves which of the following?

• A)A demand note is dishonored if the maker does not pay it on the day of presentment.
• B)An accepted demand draft is dishonored if the drawer does not pay it on the day of presentment.
• C)If a check is presented for payment directly to the payor/drawee bank for immediate payment, a refusal to pay the check within seven business days of presentment constitutes dishonor.
• D)All of the above.

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Definitions:

Receivables

Funds that customers or clients owe to a business for products or services delivered on credit.

Estimated Bad Debts

The portion of accounts receivable that a company does not expect to collect.

Carrying Amount

The recorded cost of an asset in a company's financial statements, less any accumulated depreciation or amortization.

Allowance for Doubtful Accounts

A contra-asset account used to reduce accounts receivable to its net realizable value by estimating uncollectible debts.