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AR Acct II - Unit 3
Arkansas Accounting II - Unit 3 vocabulary
| Question | Answer |
|---|---|
| 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
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