   # Which of the following is true of a maturity date? A. It must be calculated in days, not in months or years. B. It is the date when principal and interest on a note are to be repaid to the lender. C. It is the date of establishment of note terms between a lender and customer. D. It is not a characteristic of a note receivable. FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

#### Solutions

Chapter
Section FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 9, Problem 19MC
Textbook Problem
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## Which of the following is true of a maturity date?A. It must be calculated in days, not in months or years.B. It is the date when principal and interest on a note are to be repaid to the lender.C. It is the date of establishment of note terms between a lender and customer.D. It is not a characteristic of a note receivable.

To determine

Concept introduction:

Allowance method:

Under the Allowance method the estimated bad debts expenses are recorded using the Allowance for doubtful account and the actual bad debts written off using this account. Allowance for doubtful accounts represents the amount of expected bad debts or uncollectable accounts. This account is made as a provision for future bad debts.

Direct write off method:

Under the Direct write off method the actual bad debts are directly written of using the accounts receivable account.

Aging of receivable method:

Bad debts expense can be recognized with several methods. Aging of receivable method is one of those methods. In this method the receivables are categorized into different categories according to the age and percentage of uncollectible is determined for each age and bad debts are calculated using these percentages.

Percent of sales method:

Bad debts expense can be recognized with several methods. Percent of sales is one of those methods. Under this method the bad debts expense is calculated as a percentage of sales.

To choose:

The true statement about a maturity date.

### Explanation of Solution

A maturity date is the date when principal and interest is due for repayment. Hence the correct option is B.

A. A maturity date can be calculated in months of yeas as well...

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