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This type of receivable results from selling goods or services on credit.
What is Accounts Receivable?
Uncollectible accounts are commonly called this.
What are bad debts?
This method estimates bad debts in the same period as the related sales.
What is the allowance method?
This method estimates bad debts as a percentage of credit sales.
What is the percent of sales method?
A written promise to pay a specific amount plus interest.
What is a promissory note?
The account used to track how much each individual customer owes.
What is a subsidiary ledger?
This method records bad debts only when a specific account is known to be uncollectible.
What is the direct write-off method?
The contra-asset account used with accounts receivable.
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This method focuses on the desired ending balance of the allowance account.
What is the percent of receivables method?
This is the date when a note’s principal and interest must be paid.
What is the maturity date?
This happens when a company receives cash from a customer who previously bought on credit.
What is a collection of accounts receivable?
Under the direct write-off method, this account is debited when an account is written off.
What is Bad Debts Expense?
Writing off a bad debt under the allowance method affects this balance sheet total.
What is neither total assets nor net income? (net receivables stay the same)
This method sorts receivables by how long they’ve been outstanding.
What is the aging of accounts receivable method?
Interest on a note is calculated using principal, rate, and this.
What is time?
Sales using Visa, Apple Pay, or debit cards usually result in this being received quickly.
What is cash (net of fees)?
This constraint allows use of the direct write-off method when amounts are small.
What is the materiality constraint?
When a customer later pays an account previously written off, this account is first reinstated.
What is Accounts Receivable?
In aging, older receivables are assigned this compared to newer ones.
What is a higher uncollectible percentage?
Accepting a note from a customer often happens when this occurs.
What is a past-due account receivable?
This risk is avoided when a company accepts bank credit cards instead of offering its own credit.
What is the risk of nonpayment?
TechCom determines on January 23 that it cannot collect $520 owed to it by its customer J. Kent.
Debit Bad Debts Expense = $520
Credit AR = $520
Under the allowance method, writing off a specific account debits this account.
What is Allowance for Doubtful Accounts?
When the allowance account already has a credit balance, the adjusting entry will be this amount.
What is the amount needed to reach the desired ending balance?
If a 45-day note is accepted on Dec. 15th, what adjusting entry is needed on Dec. 31st?
Debit Interest Receivable
Credit Interest Earned/Revenue