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accounting chapter 8
Terms in this set (16)
An asset, which is a claim against the customer created by selling merchandise or services on credit.
Accounts Receivable Turnover
A measure of how frequently during the year the accounts receivable are being converted to cash, computed as sales divided by average accounts receivable.
aging the receivables
The process of analyzing the accounts receivable and classifying them according to various age groupings, with the due date being the base point for determining age.
Allowance for Doubtful Accounts
A contra asset account for accounts receivable in which is recorded the estimate for uncollectible accounts when using the allowance method.
The method of accounting for uncollectible receivables that recognizes an expense by estimating future uncollectible accounts at the end of the accounting period.
Bad Debt Expense
The operating expense incurred because of the failure to collect receivables.
direct write-off method
The method of accounting for uncollectible receivables that recognizes an expense only when an account is determined to be worthless.
dishonored note receivable
A note that the maker fails to pay on the due date.
The amount that is due at the maturity or due date of a note, which is the sum of the face amount and any interest.
net realizable value
The estimated selling price of a product less any costs necessary to further process the product beyond the split-off point.
amounts that customers owe for which a formal, written instrument of credit has been issued
Numbers of Days' Sales in Receivables
An estimate of the length of time the accounts receivable have been outstanding, computed as average accounts receivable divided by average daily sales.
All money claims against other entities, including people, business firms, and other organizations.
- interest receivables
- taxes receivables
- receivables from offices or employees
A major issue of selling merchandise or services on account (on credit) is that some customers will not pay their accounts. That is, some accounts receivable will be uncollectible
the process of selling accounts receivable for cash
Sets with similar terms
Acc 2010 Ch 9
Chapter 9: Receivables
Accounting Test #2 Ch. 7&8
Chapter 8 Homework Notes
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