| A | B |
|---|
| uncollectible account | accounts receivable that cannot be collected |
| writing off an account | removing an uncollectible account from the records of the business. The amount becomes an expense to the business |
| allowance for uncollectible accounts | account used to summarize the estimated uncollectible accounts receivable of the business. It is classified as a contra asset account |
| uncollectible accounts expense | account debited when a business determines that an amount owed (accounts receivable) is not going to be paid and it is removed from the accounting records |
| direct write-off method | when a business determines that the amount owed is not going to be paid, the uncollectible account is removed from the accounting records. Usually used by businesses with few charge customers. |
| allowance method | matches the estimated uncollectible accounts expense with sales made during the same period by using an estimated amount of uncollectible accounts |
| book value of accounts receivable | the amount the business can reasonably expect to collect from its accounts receivable. The difference between accounts receivable and Allowance for Uncollectible Accounts |
| percentage of net sales | method of estimating uncollectible accounts expense where the business assumes that a certain percentage of each year’s net sales will be uncollectible. |
| aging of accounts | classifies the accounts receivables according to the number of days each account is past due. |
