Accounting II - Chapter 14 Test Review

This method occurs when we credit the estimated value of uncollectible accounts to a contra account.

• Allowance method

• Writing off an account

The difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts

• Book value of accounts receivable

• Face value

The difference between an asset's account balance and its related contra account

• Book value

• Maturity value

A written and signed promise to pay a sum of money at a specified time

• Dishonored note

• Promissory note

A promissory note signed by a business and given to a creditor

• Note receivable

• Note payable

A promissory note that a business accepts from a customer

• Note payable

• Note receivable

The person or business that signs a note and thus promises to make payment

• Maker of a note

• Payee

The person or business to whom the amount of a note is payable

• Note receivable

• Payee

The allowance method for uncollectible accounts complies with GAAP

• True

• False

What is the normal balance of the account Allowance for Uncollectible Accounts?

• Debit

• Credit