Chapter 13 Terms

What is an Accounts Receivable Aging Summary?

• A document that lists all of a company's customers that have receivable balances.

• A schedule of accounts receivable organized into time buckets showing the age of amounts owed by each customer.

• A system for estimating and matching anticipated losses from uncollectible account balances.

• A report that estimates bad debts allowance by multiplying uncollectible percentage estimates.

What is the purpose of a Sales Invoice?

• To track inventory levels.

• To document the terms and methods of payment allowed.

• To estimate the bad debts allowance.

• To schedule accounts receivable.

What does SKU stand for?

• Sales Knowledge Unit.

• Stock Keeping Unit.

• Service Key Usage.

• Schedule Key Unit.

What is the Allowance Method?

• A method for scheduling accounts receivable.

• A system for tracking inventory levels.

• A system for estimating and matching anticipated losses from uncollectible account balances.

• A method for determining the amount of interest to be charged on a loan.

What is Credit Risk?

• The amount of accounts receivables a company expects to receive or “realize”.

• The yearly cost of borrowing money.

• The potential loss due to a debtor’s inability or unwillingness to repay money owed to the creditor.

• The process of removing an uncollectible amount from a customer’s account.

What is the Direct Write-off Method?

• A system for estimating bad debts.

• A method for scheduling accounts receivable.

• A system for removing individual receivables from the accounting records at the same time they are determined to be uncollectible.

• A method for calculating the annual percentage rate.

What does APR stand for?

• Annual Percentage Rate.

• Accounts Payable Rate.

• Adjusted Payment Rate.

• Annual Payable Return.

What happens when a note is dishonored?

• The note is paid by the maturity date.

• The note is not paid by the maturity date.

• The interest rate on the note is increased.

• The note is removed from the accounting records.

Who is the Maker of the Note?

• The person or organization that receives the promissory note.

• The bank that issues the promissory note.

• The person or organization who signs a promissory note agreeing to pay the note amount.

• The individual responsible for tracking the promissory note.

What is the Maturity Date of a note?

• The date the principal is to be repaid in full, plus any unpaid interest.

• The date when the note is issued.

• The date when the interest rate is determined.

• The date when the note is first used to borrow money.