Accounting 101-Chapter 7 Receivables and Investments

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davecowman
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304486
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Accounting 101-Chapter 7 Receivables and Investments
Updated:
2015-06-27 21:20:40
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Chapter7
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Receivables and Investments
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  1. Account Receivable
    A receivable arising from the sale of goods or services with a verbal agreement promise to pay
  2. Subsidiary Ledger
    The detail for a number of individual items that collectively make up a single general ledger account.
  3. Control account
    The general ledger account that is supported by a subsidiary ledger.
  4. Direct write-off method
    The recognition of bad debts expense at the point an account is written off as uncollectible.
  5. Allowance method
    A method of estimating bad debts on the basis of either the net credit sales of the period or the accounts receivable at the end of the period.
  6. Allowance for doubtful accounts
    A contra-asset account used to reduce accounts receivable to its net realizable value.
  7. Aging schedule
    A form used to categorize the various individual accounts receivable according to the length of time each has been outstanding.
  8. Accounts Receivable Turnover Ratio
    A measure of the number of times accounts receivable is collected during the period.

    Net Credit Sales/Average Accounts Receivable.
  9. Number of days' sales in receivables
    A measure of how long it takes to collect receivables.

    Number of days in period/Accounts receivable ratio.
  10. Promissory note
    A written promise to repay a definite sum of money on demand or at a fixed or determinable date in the future.
  11. Maker
    The party that agrees to repay the money for a promissory note at some future date.
  12. Payee
    The party that will receive the money from a promissory note at some future date.
  13. Note receivable
    An asset resulting from the acceptance of a promissory note from another company.
  14. Note payable
    A liability resulting from the signing of a promissory note.
  15. Principal
    the amount of cash received, or the fair value of the products or services received, by the maker when a promissory note is issued.
  16. Maturity date
    the date the promissory note is due.
  17. Term
    The length of time a note is outstanding, that is, the period of time between the date it is issued and the date it matures.
  18. Maturity value
    the amount of cash the maker is to pay the payee on the maturity date of the note.
  19. Interest
    the difference between the principal amount of the note and its maturity value.
  20. Discounting
    The process of selling a promissory note.
  21. Equity securities (Stocks)
    Securities issued by corporations as a form of ownership in the business.
  22. Debt securities
    Securities issued by corporations and governmental bodies as a form of borrowing.
  23. CD (Certificate of Deposit)

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