The practice of placing dishonoured notes receivable into Accounts Receivable keeps only current notes receivable in the Notes Receivable account.

Question

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Placing dishonoured notes receivable into Accounts Receivable removes them from the Notes Receivable account, ensuring that only current, active notes remain in the Notes Receivable account, thus maintaining its accuracy and relevance.

The Practice of Placing Dishonoured Notes Receivable into Accounts Receivable