Term
| Accounts Receivable Turnover |
|
Definition
| Net Credit Sales (or net sales) divided by average net accounts recivable. Debit CAsh, CRedit AR |
|
|
Term
|
Definition
| A means of classifying accounts receivable according to their age; used to determine the necessary balance in an Allowance for Uncollectible Accounts. A different uncollectibility percentage rate is used for each age category |
|
|
Term
| Allowance for Uncollectible Accounts |
|
Definition
| A contra asset account to the Accounts Receivable account; it reduces accounts receivable to their net realizable value. AKA Allowance for Doubtful Accounts or Allowance for Bad Debts. |
|
|
Term
|
Definition
| The difference between the maturity value of a note and the actual amount-the note's proceeds-given to the borrower. |
|
|
Term
|
Definition
| The maturity value of a note less the bank discount. |
|
|
Term
| Clearly Determinable Liabilities |
|
Definition
| Liabilities whose existence and amount are certain. Examples include accounts payable, notes payable, interest payable, unearned delivery fees, wages payable, sales tax payable, current potions of long term debt and various payroll liabilites. |
|
|
Term
|
Definition
| Liabilities whose existence is uncertain. Their amount is also usually uncertain. Both their existence and amount depend on some future event that may or may not occur. LAwsuits, income tax disputes. |
|
|
Term
| Credit Card Expense Account |
|
Definition
| USed to record credit car agency's service changes for services rendered in processing credit card sales. |
|
|
Term
|
Definition
| Obligations tat are 1. Payable within one year or one operating cycle, whichever is longer, or 2. will be paid out of current assets or result in the creation of other liabilites. |
|
|
Term
| Discount on Notes Payable |
|
Definition
| A contra account used to reduce notes payable from face value to the net amount of debt. |
|
|
Term
| Discounting a note payable |
|
Definition
| The act of borrowing a given period's total net credit sales or net sales. |
|
|
Term
|
Definition
| The face value of a note. |
|
|
Term
|
Definition
| An unconditional written promise by a borrower to pay a definite sum of money to the lender or demand at a specific date. |
|
|
Term
|
Definition
| The stated interest rate on the note |
|
|
Term
|
Definition
| Any sum of money due to be paid to a company from any party for any reason. |
|
|
Term
|
Definition
| A note that the maker failed to pay at maturity. |
|
|
Term
|
Definition
| Liabilities whose existence is certain, but whose amount can only be estimated. e.g. Product warranty payable. |
|
|
Term
|
Definition
| The fee charged for use f money over a period of time. |
|
|
Term
|
Definition
| An account showing the interest expense incurred but not yet paid; reported as a current liability in the balance sheet. |
|
|
Term
| Interest Receivable Account |
|
Definition
| An account showing the interest earned but not yet collected; reported as an a current asset in the balance sheet. |
|
|
Term
|
Definition
| Obligations that result from some past transaction and are obligations to pay cash, perform services, or deliver goods at some time in the future. |
|
|
Term
|
Definition
| Obligations that do not qualify as current liabilities. |
|
|
Term
|
Definition
| The party who prepares a note and is responsible for paying the note at maturity. |
|
|
Term
|
Definition
| The date on which a note becomes due and must be paid. |
|
|
Term
|
Definition
| The amount that the maker must pay on the note on its maturity date. |
|
|
Term
|
Definition
| The amount the company expects to collect from accounts receivable. |
|
|
Term
| Number of days' sales in accounts receivable |
|
Definition
| The number of days in a year (365) divided by the accounts receivable turnover. |
|
|
Term
|
Definition
| The time it takes to start with cash, buy necessary items to produce revenues, sell goods or services, and receive cash by collecting resulting receivables. |
|
|
Term
|
Definition
| Any sum of money due to be paid by a company to any party for any reason. |
|
|
Term
|
Definition
| The party who receives a note will be paid cash at maturity. |
|
|
Term
| Percentage of receivables method |
|
Definition
| A method for determining the desired size of the ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS by basing the calculation on the accounts receivable balance at the end of the period. |
|
|
Term
| Percentage of Sales Method |
|
Definition
| A method of estimating the uncollectible accounts from the sales a given period's total net credit sales or net sales. |
|
|
Term
|
Definition
| The amount of time the note is to run. |
|
|
Term
|
Definition
| Amounts customers owe a company for goods or services rendered on account. AKA accounts receivable or trade accounts receivable. |
|
|
Term
| Uncollectible Accounts Expense |
|
Definition
| An operating expense that a business incurs when it sells on credit; also called doubtful accounts expense or bad debts expense. |
|
|
Term
| Is Uncollectible Accounts Expense a Debit or Credit |
|
Definition
|
|
Term
| What is the opposite of Uncollectible Accounts Expense |
|
Definition
| Allowance for Uncollectible Accounts |
|
|
Term
| What is the effect of recording Bad Debt |
|
Definition
| Decrease Net Income, Decrease net A/R, Decrease total Assets. |
|
|
Term
| Entry for Writing off Bad Debts, |
|
Definition
| Debit Allowance for Uncollectible Accounts, Credit Accounts REceivable. |
|
|
Term
| Effect of writing off Bad Debts |
|
Definition
| NO INCME ON BALANCE SHEET. |
|
|
Term
|
Definition
| Credit AR, Debit Allowance for Uncollectible Accounts |
|
|
Term
| Steps to Percentage of receivables method |
|
Definition
| Multiply the ending balance in AP by a percentage estimated as uncollectible. Compare result to existing allowance for uncollectible accounts. DIFFERNCE IS uncollectible account expense for the period. |
|
|
Term
|
Definition
| go through aging probabilities, add up probable amounts, take differnce from balance of allowance for bad debts. |
|
|
Term
|
Definition
| NEt Credit SAles / Average AP |
|
|
Term
| Number of Days SAles in AR |
|
Definition
|
|
Term
|
Definition
|
|
