Chapter 8 Flashcards Preview

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Flashcards in Chapter 8 Deck (20):
1

Ratio that measures the number of times the company collects the average accounts receivable in a year

Accounts Receivable Turnover Ratio

2

Tells if a company could pay all liabilities if immediately due

Acid-Test Ratio

3

Method of estimating uncollectible receivables by determining the balance of Allowance for Bad Debts based on the age of individual accounts receivable

Aging-of-Receivables Method

4

Contra account related to accounts receivable that holds the estimated amount of uncollectible accounts

Allowance for Bad Debts

5

Method of accounting for uncollectible receivables where the company estimates bad debt expense

Allowance Method

6

Cost to the seller of extending credit that arises from failure to collect any credit owed by customers

Bad Debt Expense

7

Ratio that determines how many days it takes to collect the average levels of accounts receivable

Days' sales in Receivables

8

Party to a credit transaction that takes on an obligation/payable

Debtor

9

Method of accounting for uncollectible receivables where bad debt expense is recorded when a customer's account receivable is uncollectible

Direct Write-off Method

10

Failure of a note's maker to pay a note receivable at maturity

Dishonor a Note

11

Revenue to the payee for loaning money, expense to the debtor

Interest

12

Period of time where interest is computed. extends from the original date of the note to maturity date

Interest Period

13

Percentage rate of interest specified by the note

Interest Rate

14

Date when the note is due

Maturity Date

15

Sum of the principle plus interest due at maturity

Maturity Value

16

Net value a company expects to collect from its accounts receivable. Accounts Receivable-Allowance for Bad Debts

Net Realizable Value

17

Method of estimating uncollectible receivables by determining the Allowance for Bad Debts account based on a percentage of accounts receivable

Percent-of-Receivables Method

18

Method of estimating uncollectible receivablews that calculates bad debt expense based on a percentage of net credit sales

Percentage-of-Sales-Method

19

Amount loaned out by the payee and borrowed by the maker of the note

Principle

20

Monetary claim against a business or an individual

Receivable