Chapter 14

Question 1

Accounts receivable that cannot be collected

Answer 1

Uncollectible accounts

Question 2

Crediting the estimated value of uncollectible accounts to a contra account

Answer 2

Allowance method

Question 3

The difference by an asset’s account balance and its related contra account balance

Answer 3

Book value

Question 4

The difference bt the balance of Accts Recievable & it’s contra account, Allowance for Uncollectible Accts

Answer 4

Book value of Accts Recievable

Question 5

The amount of Accts Receivable a business expects to collect

Answer 5

Net realizable value

Question 6

A method used to estimate uncollectible accounts receivable that assumes a percent of credit sales will become uncollectible

Answer 6

Percent of sales method

Question 7

A method used to estimate uncollectible accounts receivable to estimate the amount that will be uncollectible

Answer 7

Percent of accounts receivable method

Question 8

Analyzing accounts receivable according to when they are due

Answer 8

Aging of accounts receivable

Question 9

Canceling the balance of the customer account because the customer does not pay

Answer 9

Writing off an account

Question 10

Recording uncollectible accounts expense only when an amount is actually known to be uncollectible

Answer 10

Direct write off method

Question 11

A written and signed promise to pay a sum of money at a specified time

Answer 11

Promissory note

Question 12

A promissory note signed by business and given to a creditor

Answer 12

Note payable

Question 13

A promissory note that a business excepts from a person or business

Answer 13

Note receivable

Question 14

The person or business that signs a note and thus promises to make payment

Answer 14

Maker of a note

Question 15

The person or business to whom the amount of a note is payable

Answer 15

Payee

Question 16

The original amount of a note sometimes referred to as the face amount

Answer 16

Principal

Question 17

The percentage of the principle that is due for the use of the funds secured by a note

Answer 17

Interest rate

Question 18

The date on which the principal of the note is due to be repaid

Answer 18

Maturity date

Question 19

The length of time from the signing date of a note to the maturity date

Answer 19

Time of a note

Question 20

The amount that is due on the maturity date of a note

Answer 20

Maturity value

Question 21

The interest earned on money loans

Answer 21

Interest income

Question 22

A note that is not paid when due

Answer 22

Dishonored note

Question 23

What are the debits and credits for an adjusting entry?

Answer 23

Debit: Uncollectible Accts Expense
Credit: Allowance for Uncollectible Accts

Question 24

What is the debit and credit for writing off an uncollectible account receivable

Answer 24

Debit: Allowance for Uncollectible Accts
Credit: Accts Receivable

Question 25

What is the debit and credit for re-opening an account previously written off? ("Received cash in full payment of...")

Answer 25

Debit: Accts Receivable Credit: Allowance for uncollectible accounts

Question 26

What is the debit and credit when recording cash received for an account previously written off? ("Received cash in full payment of...")

Answer 26

Debit: Cash Credit: A/R

Question 27

What is the debit and credit when excepting a note receivable from a customer?

Answer 27

Debit: Notes Receivable Credit: Accts Receivable

Question 28

What formula do you use to calculate the interest for a fraction of the year?

Answer 28

Principal x Interest Rate x Time as Fraction of Year (i.e. 90/360)

Question 29

What are the debits and credits when receiving cash for the maturity value of a note receivable?

Answer 29

Debit: Cash Credits: Notes Receivable and Interest Income

Question 30

What are the debit and credit when recording a dishonored note receivable?

Answer 30

Debit: Accts Receivable Credits: Notes Receivable and Interest Income