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Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition by Donald E. Kieso, Paul D. Kimmel, Jerry J. Weygandt

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EXERCISE 8-7

Purpose: (L.O. 1 thru 9) This exercise will quiz you about terminology used in this chapter.

A list of accounting terms with which you should be familiar appears below.

Accounts receivable Factor
Accounts receivable turnover ratio Maker
Aging the accounts receivable Notes receivable
Allowance for doubtful accounts Other receivables
Allowance method Payee
Average collection period Percentage-of-receivables basis
Bad Debt Expense Percentage-of-sales basis
Cash (net) realizable value Promissory note
Direct write-off method Receivables
Dishonored note Trade receivables

Instructions

For each item below, enter in the blank the term that is described.

  1. _____________________Amounts due from individuals and other companies.
  2. _____________________Amounts owed by customers on account.
  3. _____________________Claims for which formal instruments of credit are issued as proof of the debt.
  4. _____________________Various forms of nontrade receivables, such as interest receivable and income taxes refundable.
  5. _____________________The analysis of customer balances by the length of time they have been unpaid.
  6. _____________________Management establishes a percentage relationship between the expected losses from uncollectible accounts and the amount of receivables.
  7. _____________________Management establishes a percentage relationship between expected losses from uncollectible accounts and the amount of credit sales.
  8. _____________________The net amount expected to ...

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