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Accounting: Chapter 14 Vocab

Terms in this set (22)

uncollectible accounts
accounts receivable that cannot be collected
allowance method
crediting the estimated value of uncollectible accounts to a contra account
book value
the difference between an asset's account balance and its related contra account balance
book value of accounts recievable
the difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts
net realizable value
the amount of accounts receivable a business expects to collect
percent of sales method
a method used to estimate uncollectible accounts receivable that assumes a percent of credit sales will become uncollectible
percent of accounts receivable method
a method used to estimate uncollectible accounts receivable that uses an analysis of accounts receivable to estimate the amount that will be uncollectible
aging of accounts receivable
analyzing accounts receivable according to when they are due
writing off on an account
canceling the balance of a customer account because the customer does not pay
direct write-off method
recording uncollectible accounts expenses only when an amount is actually known to be uncollectible
promissory note
a written and signed promise to pay a sum of money at a specified time
note payable
a promissory note signed by a business and given to a creditor
note recievable
a promissory note that a business accepts from a person or business
maker of a note
the person or business that signs a note, and thus promises to make payment
payee
the person or business to whom the amount of a note is payable
principal
the original amount of a note, sometimes referred to as the face amount
interest rate
the percentage of the principal that is due for the use of funds secured by a note
maturity date
the date on which the principal of a note is due to be repaid
time of a note
the length of time from the signing date of a note to the maturity date
maturity value
the amount that is due on the maturity date of a note
interest income
the interest earned on money loaned
dishonored note
a note that is not paid when due
THIS SET IS OFTEN IN FOLDERS WITH...