Question

The notes receivable account of a business should include both the notes that haven't matured and the dishonored notes.
a. True
b. False

Answer 1

This statement is false. The notes receivable account should only include those notes which can still be collected. Notes that have not matured yet is still included in the notes receivable account because there is still the probability of collection. Dishonored notes should not anymore be included because there is no more probability of collection.