Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition

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 ...