Receivables Flashcards
1
Q
What does it mean when a Note/AR is sold WITH Recourse mean?
A
with recourse is a promise to pay the financial institution if the maker dishonors the note.
When receivables are sold with recourse, the entity has a contingent liability. A contingent liability is an obligation that has to be paid in the future
2
Q
A note receivable sold to a bank With Recourse. At the date of the discounting transaction, the discounted account should be
A
increased by the face amount of the note
