Notes receivable discounted,

Definition of Notes receivable discounted:

1. Account shown as a contra account to notes receivable account. It records the amount of notes-receivable that have been discounted (sold to a bank or factor before their maturity date at a sum lower than their par value) on with recourse basis. It also discloses the contingent liability that may arise if the maker or writer of the note (the buyer or debtor) defaults and the firm becomes liable for payment.