The Notes Receivable Discounted account
A)has a debit balance.
B)is shown as a deduction from Notes Receivable on the balance sheet.
C)is used to record the amounts due on dishonored notes.
D)is used to record the amount of interest deducted by the bank when a note is discounted.

Question

Quizplus · Accepted Answer

The Notes Receivable Discounted account is shown as a deduction from Notes Receivable on the balance sheet because it represents the contingent liability that the company may have to pay if the note is dishonored.

The Notes Receivable Discounted Account