Term
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Definition
| amounts owed by customers on accounts. (p. 358) |
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Term
| accounts receivable turnover ratio |
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Definition
| a measure of the liquidity of accounts receivable; computed by dividing net credit sales by average net accounts receivable. (p. 374) |
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Term
| aging the accounts receivable |
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Definition
| the analysis of customer balances by the length of time they have been unpaid. (p. 364) |
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Term
| allowance for doubtful accounts |
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Definition
| an account that sows the estimated amount of claims on customers that the company expects will become uncollectible in the future. (p. 362) |
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Term
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Definition
| a method of accounting for bed debts that involves estimating uncollectible accounts at the end of each period. (p. 361) |
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Term
| average collection period |
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Definition
| the average amount of time that a receivable is outstanding; calculated by dividing 365 days by the accounts receivables turnover ratio. (p. 375) |
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Term
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Definition
| an expense account to record uncollectible receivables. (p. 360) |
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Term
| cash (net) realizable value |
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Definition
| the net amount a company expects to receive in cash. (p. 361) |
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Term
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Definition
| a method of accounting for bad debts that involves expensing accounts at the time they are determined to be uncollectible. (p. 360) |
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Term
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Definition
| a note that is not paid in full at maturity. (p. 3723) |
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Term
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Definition
| a finance company or bank that buys receivables from businesses and then collects the payments directly from the customers. (p. 367) |
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Term
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Definition
| the party in a promissory note who is making the promise to pay. (p. 369) |
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Term
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Definition
| claims for which formal instruments of credit are issued as proof of the debt. (p. 358) |
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Term
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Definition
| various forms of nontrade receivables, such as interest receivable and income taxes refundable. (p. 358) |
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Term
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Definition
| the party to whom payment of a promissory note is to be made. (p. 369) |
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Term
| percentage-of-receivables basis |
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Definition
| management estimates what percentage of receivables will result in losses from uncollectible accounts. (p. 364) |
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Term
| percentage-of-sales basis |
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Definition
| management estimates what percentage of credit sales will be uncollectible. (p. 364) |
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Term
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Definition
| a written promise to pay a specified amount of money on demand or at a definite time. (p. 369) |
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Term
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Definition
| amounts due from individuals and other companies. (p. 358) |
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Term
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Definition
| notes and accounts receivable that result from sales transactions. (p. 358) |
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