| A | B |
|---|
| Accounts receivable | Amounts owed by customers on account. |
| Accounts receivable turnover ratio | A measure of the liquidity of accounts receivable; computed by dividing net credit sales by average net accounts receivable. |
| Aging the accounts receivable | The analysis of customer balances by the length of time they have been unpaid. |
| Allowance method | A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period. |
| Average collection period | The average amount of time that a receivable is outstanding; calculated by dividing 365 days by the accounts receivables turnover ratio. |
| Bad Debts Expense | An expense account to record uncollectible receivables. |
| Cash (net) realizable value | The net amount a company expects to receive in cash. |
| Direct write-off method | A method of accounting for bad debts that involves expensing accounts at the time they are determined to be uncollectible. |
| Dishonored note | A note that is not paid in full at maturity. |
| Factor | A finance company or bank that buys receivables from businesses and then collects the payments directly from the customers. |
| Maker | The party in a promissory note who is making the promise to pay. |
| Notes receivable | Claims for which formal instruments of credit are issued as proof of the debt. |
| Other receivables | Various form of nontrade receivables, such as interest receivable and income taxes refundable. |
| Payee | The party to whom payment of a promissory note is to be made. |
| Percentage-of-receivables basis | Management estimates what percentage of receivables will result in losses from uncollectible accounts. |
| Percentage-of-sales basis | Management estimates what percentage of credit sales will be uncollectible. |
| Promissory note | A written promise to pay a specified amount of money on demand or at a definite time. |
| Receivables | Amounts due from individuals and other companies. |
| Trade receivables | Notes and accounts receivable that result from sales transactions. |
