Chapter 14 Study Guide Accounting 2 – Flashcards
22 test answers
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Direct Write-Off Method
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Recording uncollectible accounts expense only when an amount is actually known to be uncollectible
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Dishonored Note
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A note that is not paid when due
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Interest Income
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The interest earned on money loaned
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Interest Rate
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The percentage of the principal that is due for the use of the funds secured by a note.
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Maker of a Note
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The person or business that signs a note, and thus promises to make full payment
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Maturity Date
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The date on which the principal of a note is due to be repaid
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Maturity Value
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The amount that is due on the maturity date of a note
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Net Realizable Value
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The amount of accounts receivable a business expects to collect
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Note Payable
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A promissory note signed by a business and given to a creditor
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Note Receivable
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A promissory note that a business accepts from a person or business
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Payee
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The person or business to whom the amount or a note is payable
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Percent of Accounts Receivable Method
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A method used to estimate uncollectible accounts receivable that uses an analysis of accounts receivable to estimate the amount that will be uncollectible.
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Percent of Sales Method
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A method used to estimate uncollectible accounts receivable that assumes a percent of credit sales will become uncollectible
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Principal
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The original amount of a note, sometimes referred to as the face amount
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Promissory Note
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A written and signed promise to pay a sum of money at a specific time
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Time of a Note
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The length of time from the signing date of a note to the maturity date
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Uncollectible Accounts
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Accounts receivable that cannot be collected
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Writing Off an Account
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Canceling the balance of a customer account because the customer does not pay
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