Arkansas Accounting II - Unit 3 vocabulary
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| accounts receivable turnover ratio | the number of times the average amont of accounts receivable is collected during a specified period
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| accrued expenses | expenses incurred in one fiscal period but not paid until a late fiscal period
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| accrued revenue | revenue earned in one fiscal peiod but not reeceived until a late fiscal period
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| aging accounts receivable | analyzing accounts receivable according to when they are due
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| allowance method of recording losses from uncollectible accounts | crediting the estimated value of uncollectible accounts to a contra account
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| assessed value | the value of an asset determined by tax authorities for the purpose of calculating
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| average number of days' sales in merchandise inventory | the period of time needed to sell an average amount of merchandise inventory
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| book value of accounts receivable | the difference between the balance of accounts receivable and its contra accounts, allowance for uncollectible accounts
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| book value of a plant asset | the original cost of a plant asset minus accumulated depreciation
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| consignee | the person or business who receives goods on consignment
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| consignment | goods that are given to a business to sell but for which title to the goods remains with the vendor
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| consignor | the person or business who gives goods on consignment
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| contra assets | an item that is entered on the asset side of an accounting ledger even though the item has a credit (negative) balance
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| contra liability | an account that has a debit balance and offsets the credit balance of the corresponding liability
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| date of a note | the day a note is issued
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| declining-blance method of depreciation | multiplying the book value at the end of each fiscal period by a constant depreciation rate
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| depletion | the decrease in the value of a plant asset because of the removal of a natural resource
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| depreciation | a systematic procedure for allocationg the cost of a plant asset tho the accounting periods in which the firm receives service from that asset
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| direct write-off method of recording losses from uncollectible accounts | recording uncollectible accounts expenses only when an amount is actually known to be uncollectible
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| dishonored note | a note that is not paid when due
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| fair market value | the estimated price at which an asset or service would pass from a willing seller to a willing buyer
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| first-in, first-out inventory costing method (FIFO) | using the price of merchandise purchased first to calculate the cost of merchandise sold first
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| historical costs | all costs incurred by a business to operate, maintain, repair, replace, or construct
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| interest | an amount paid for the use of money for a period of time
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| interest expense | the interest accrued on money borrowed
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| interest rate of a note | the percentage of the principal that is paid for use of the money
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| inventory record | a form used during a periodic inventory to record information about each item of merchandise on hand
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| last-in, first-out inventory costing method (LIFO) | using the price of merchandise purchased last to calculate the cost of merchandise sold first
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| lower of cost or market inventory costing method | using the lower of cost or market price to calculate the cost of ending merchandise inventory
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| maturity date of a note | the date a note is due
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| maturity value | the amount that is due on the maturity date of a note
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| merchandise inventory turnover ratio | the number of times the average amount of merchandise inventory is sold during a specific period of time
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| modified accelerated cost recorvery system | depreciation method required by the Internal Revenue Service to be used for income tax calculation purposes for most plant assets placed in service after 1986
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| net 30 | a form of trade credit which specifies payment is expected to be received in full 30 days after the goods are delivered
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| notes payable | promissory notes that a business issues to creditors
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| notes receivable | promissory notes that a business accepts from customers
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| periodic inventory | a merchandise inventory determined by counting, weighing, or measuring items of merchandise on hand
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| perpetual inventory | a merchandise inventory determined by keeping a continuous record of increases, decreases, and balance on hand
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| personal property | all property not classified as real property
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| plant asset record | an accounting form on which a business records information about each plant asset
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| prepaid expenses | expenses paid in one fiscal period but not reported as expenses until a later fiscal period
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| principal of a note | the original amount of a note
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| production unit method of depreciation | method in which depreciation is computed on the basis of an asset's actual use, instead of the time in service, to match depreciation expense with the revenue generated
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| production | unit method of depreciation-calculating estimated annual depreciation expenses based on the amount of production expected from a plant asset
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| promissory note | a written and signed promise to pay a sum of money at a specified time
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| purchase order | a completed form authorizing the seller to deliver goods with payment to be made later
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| real property | land and anything attached to the land
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| retail method of estimating inventory | estimating inventory by using a percentage based on both cost and retail prices
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| reversing entry | an entry made at the beginning of one fiscal period to reverse an adjusting entry made in the previous fiscal period
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| shrinkage | the amount of percentage of profit lost to shoplifting, employee theft, and paperwork error
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| spoilage | material or the amount of material that is spoiled or wasted
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| stock ledger | a file of stock records for all merchandise on hand
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| stock record | a form used to show the kind of merchandise, quantity received, quantity sold, and balance on hand
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| straight line method of depreciation | charging an equal amount of depreciation expense for a plant asset in each year of useful life
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| sum-of-the-years' digit method of depreciation | using fractions based on years of a plant asset's useful life
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| uncollectible accounts | accounts receivable that cannot be collected
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| unearned revenue | revenue received in one fiscal period but not earned until the next fiscal period
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| weighted-average inventory costing method | using the average cost of beginning inventory plus merchandise purchased during a fiscal period to calculate the cost of merchandise sold
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| writing off an account | canceling the balance of a customer account because the customer does not pay
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