| A | B |
|---|
| Accounts Receivable | represents the amount which customers owe to a company due to purchasing goods or services |
| Allowances | money set aside in the expectation of expenses which will occur within a future time period |
| Allowance Approach | method of estimating future uncollectible accounts receivable and using a contra asset account for reporting purposes |
| Audit Examination | used in year-end testing procedures to check the accuracy of the accounts receivable balance |
| Bad Debt Calculation | calculation to determine the amount needed, usually in percent form, to update the balance in the allowance for doubtful accounts |
| Balance Sheet | used by lenders, investors and creditors to estimate the liquidity of a business, also known as the statement of financial position; the balances in asset accounts should always equal the sum of balances in the liability and owner’s equity accounts |
| Cash Flow Statement | financial statement which shows how balance sheet and income statement changes affect the flow of cash |
| Cash Sale | when a customer pays for a good at the time it is received or a service when it is rendered |
| Collections Team | team which examines a schedule to determine which invoices are overdue and collects outstanding sums on accounts |
| Contra Asset | asset account which has a normal credit balance instead of a debit balance |
| Control Account | account in the general ledger which contains the grand totals of individual subsidiary ledger or journal transactions |
| Customer File | a means of tracking all invoices and payments from customers |
| Direct Write-Off Approach | the recognition of an unpaid customer account in which accounts receivable is credited; bad debt expense is debited |
| Financing Activities | cash flow-resulting transactions with creditors or investors which are used to fund the activities of the business |
| Investing Activities | cash flow generated from investments in financial markets or long-term capital assets |
| Operating Activities | cash flow generated from goods transferred and services completed in the course of doing business |
| Sale on Account | customer receives good or service and promises to pay at a later date |
| Sales Invoice | bill to the customer after the transfer of goods or the completion of services which represents a financial transaction between the buyer and is usually payable at a later date |
| Terms of Payment | payment rules imposed by suppliers to their customers |
| Sales Order | document which confirms a purchase of goods and services for the customer |
| Sales Return | merchandise returned by a buyer to the seller/producer, often a result of damaged or defective goods |
| Subsidiary Ledger | used to track transactions found in one type of account in detail |
| Unbalanced Sheet | financial statement in which the sum of the balances in the asset accounts does not equal the sum of the balances in the liability and equity accounts |
