| A | B |
|---|
| Accounts Receivable | Amounts due from customers for credit sales; backed by the customer's general credit standing. |
| Accounts Receivable Turnover | Measure of both the quality and liquidity of accounts receivable; indicates how often receivables are received and collected during the period; computed by dividing net sales by average accounts receivable. |
| Aging of Accounts Receivable | Process of classifying accounts receivable by how long they are past due for purposes of estimating uncollectible accounts. |
| Allowance for Doubtful Accounts | Contra asset account with a balance approximating uncollectible accounts receivable; also called Allowance for Uncollectible Accounts. |
| Allowance Method | Procedure that (a) estimates and matches bad debts expense with its sales for the period and/or (b) reports accounts receivable at estimated realizable value. |
| Bad Debts | Accounts of customers who do not pay what they have promised to pay; an expense of selling on credit; also called uncollectible accounts. |
| Direct Write-Off Method | Method that records the loss from an uncollectible account receivable at the time it is determined to be uncollectible; no attempt is made to estimate bad debts. |
| Interest | Charge for using money (or other assets) loaned from one entity to another. |
| Maker of the Note | Entity who signs a note and promises to pay it at maturity. |
| Matching Principle | Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses. |
| Materiality Principle | Prescribes that accounting for items that significantly impact financial statement and inferences from them adhere strictly to GAAP. |
| Maturity Date of a Note | Date when a note's principal and interest are due. |
| Payee of the Note | Entity to whom a note is made payable. |
| Principal of a Note | Amount that the signer of a note agrees to pay back when it matures, not including interest. |
| Promissory Note (Note) | Written promise to pay a specified amount either on demand or at a definite future date; is a note receivable for the lender but a not payable for the lendee. |
| Realizable Value | Expected proceeds from converting an asset into cash. |
