The notes receivable sold to a bank or finance company to raise finance are called dishonored notes receivable.

Question

Quizplus · Accepted Answer

Dishonored notes receivable are those that are not paid by the debtor and therefore, are not sold to a bank or finance company for financing. Instead, they become accounts receivable, and the company may continue to pursue collection efforts or take legal action to recover the unpaid amount.

The Notes Receivable Sold to a Bank or Finance Company