Matching
Match each of the following terms with the appropriate definitions.
Premises:
Refers to a note maker’s inability or refusal to pay the note at maturity.
A measure of both the quality and liquidity of accounts receivable. It indicates how often, on average, receivables are received and collected during the period.
Amounts owed by customers from credit sales for which payment is required in periodic payments over an extended period of time.
A method of accounting for bad debts that matches the estimated loss from uncollectible accounts receivable against the sales they helped to produce.
The accounting constraint that states that an amount can be ignored if its effect on the financial statements is unimportant to their users.
The amount that the signer of a note agrees to pay back when the note matures, not including interest.
A buyer of accounts receivable who charges the seller a fee and then receives cash from the receivables as they come due.
The accounting principle that requires the financial statements (including the notes) to report all relevant information about operations and financial condition.
One who signs a note and promises to pay it at maturity.
A method of accounting for bad debts that records the loss from an uncollectible account receivable when it is determined to be uncollectible.
Responses:
Full disclosure principle
Direct write-off
Dishonoring a note
Maker of a note
Materiality constraint
Allowance method
Accounts receivable turnover
Principal of a note
Installment accounts receivable
Factor
Correct Answer:
Premises:
Responses:
Refers to a note maker’s inability or refusal to pay the note at maturity.
A measure of both the quality and liquidity of accounts receivable. It indicates how often, on average, receivables are received and collected during the period.
Amounts owed by customers from credit sales for which payment is required in periodic payments over an extended period of time.
A method of accounting for bad debts that matches the estimated loss from uncollectible accounts receivable against the sales they helped to produce.
The accounting constraint that states that an amount can be ignored if its effect on the financial statements is unimportant to their users.
The amount that the signer of a note agrees to pay back when the note matures, not including interest.
A buyer of accounts receivable who charges the seller a fee and then receives cash from the receivables as they come due.
The accounting principle that requires the financial statements (including the notes) to report all relevant information about operations and financial condition.
One who signs a note and promises to pay it at maturity.
A method of accounting for bad debts that records the loss from an uncollectible account receivable when it is determined to be uncollectible.
Premises:
Refers to a note maker’s inability or refusal to pay the note at maturity.
A measure of both the quality and liquidity of accounts receivable. It indicates how often, on average, receivables are received and collected during the period.
Amounts owed by customers from credit sales for which payment is required in periodic payments over an extended period of time.
A method of accounting for bad debts that matches the estimated loss from uncollectible accounts receivable against the sales they helped to produce.
The accounting constraint that states that an amount can be ignored if its effect on the financial statements is unimportant to their users.
The amount that the signer of a note agrees to pay back when the note matures, not including interest.
A buyer of accounts receivable who charges the seller a fee and then receives cash from the receivables as they come due.
The accounting principle that requires the financial statements (including the notes) to report all relevant information about operations and financial condition.
One who signs a note and promises to pay it at maturity.
A method of accounting for bad debts that records the loss from an uncollectible account receivable when it is determined to be uncollectible.
Responses:
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