Chapter 8 Vocab

Chapter 8 Vocab - Chapter 8 Vocab 1) Accounts Receivable:...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 8 Vocab 1) Accounts Receivable: Amounts owed by customers on account. 2) A/R Turnover Ratio: A measure of the liquidity of A/R; computed by dividing net credit sales by average net A/R. 3) Aging the A/R: The analysis of customer balances by length of time they have been unpaid. 4) Allowance for Doubtful Accounts: An account that shows the estimated amount of claims on customers that the company expects will become uncollectible in the future. 5) Allowance Method: A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period. 6) Average Collection Period: The average amount of time that a receivable is outstanding; calculated by dividing 365/A/R Turnover Ratio. 7) Bad Debts Expense: An expense account to record uncollectible receivables. 8) Cash (net) Realizable Value: The net amount a company expects to receive in cash. 9) Direct Write off Method: A method of accounting for bad debts that involves expensing accounts at the time they are determined to be uncollectible.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/13/2011 for the course ACCT 272 taught by Professor Mensah during the Fall '08 term at Rutgers.

Ask a homework question - tutors are online