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HHS Accounting Ch14
Terms for Chapter 14 - Century 21 Accounting, 10E
Term | Definition |
---|---|
allowance method | Crediting the estimated value of uncollectible accounts to a contra account. |
book value of accounts receivable | The difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts. |
book value | The difference between an asset's account balance and it related contra account. |
net realizable value | The amount of accounts receivable a business expects to collect. |
percent of sales method | A method used to estimate uncollectible accounts receivable that assumes a percent of credit sales will become uncollectible. |
percent of accounts receivable method | A method that uses an analysis of accounts receivable to estimate the amount that will be uncollectible. |
aging of accounts receivable | Analyzing accounts receivable according to when they are due. |
writing off an account | Canceling the balance of a customer account because the customer does not pay. |
promissory note | A written and signed promise to pay a sum of money at a specified time. |
note payable | A promissory note signed by a business and given to a creditor. |
note receivable | A promissory note that a business accepts from a customer. |
maker of note | The person or business that signs a note and thus promises to make payment. |
payee | The person or business to whom the amount of a note is payable. |
principal | The original amount of a note, sometimes referred to as the face amount. |
interest rate | The percentage of the principal that is due for the use of the funds secured by a note. |
maturity date | The date on which the principal of a note is due to be repaid |
time of a note | The length of time from the signing date of a note to the maturity date. |
maturity value | The amount that is due on the maturity date of a note. |
interest income | The interest earned on money loaned. |
dishonored note | A note that is not paid when due. |
direct write-off method | Recording uncollectible accounts expense only when an amount is actually known to be uncollectible. |
uncollectible accounts | Accounts receivable that cannot be collected. |