Term
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Definition
| requires that revenues be recorded when they are earned |
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Term
| Credit Cards Sales to Customers |
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Definition
1) Increasing customer traffic
2) Avoiding the costs of providing credit directly to consumers, including recordkeeping and bad debts.
3) Lowering losses due to bad checks
4) Avoiding losses from fraudulent credit card sales.
5) Receiving money faster. |
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Term
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Definition
| is the fee charged by the credit card company for its services |
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Term
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Definition
| a cash discount offered to encourage prompt payment of an account payable |
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Term
| Sales Returns and Allowances |
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Definition
| a reduction of sales revenues for a return of or allowances for unsatisfactory goods. |
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Term
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Definition
| open accounts owed to the business by trade consumers |
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Term
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Definition
| written promises that require another party to pay the business under specified conditions (amount, time, interest) |
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Term
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Definition
| bases bad expense on an estimate of uncollectible accounts |
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Term
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Definition
| The expense associated with estimated uncollectible accounts receivable |
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Term
| Allowance for Doubtful Accounts |
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Definition
| a contra-asset account containing the estimated uncollectible accounts receivable |
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Term
| Percentage of Credit Sales Method |
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Definition
| bases bad debt expense on the historical percentage of credit sales that result in bad debt |
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Term
| Aging of Accounts Receivable Method |
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Definition
| estimates uncollectible accounts based ont eh age of each account receivable |
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Term
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Definition
| (Gross profit) divided by (net sales) |
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Term
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Definition
| (Net Sales) divided by (Average Net Trade Accounts Receivable) |
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