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AR Acct II - Unit 3

Arkansas Accounting II - Unit 3 vocabulary

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