Accounting Vocab 14.1-14.2

What does the term "Aging of accounts receivable" refer to?

• The process of categorizing accounts by their sizes.

• The method of recording uncollectible accounts expense.

• Analyzing accounts receivable according to when they are due.

• The amount of accounts receivable that is due on the maturity date of a note.

What is the "Allowance method" used for?

• Recording uncollectible accounts expense when an amount is known to be uncollectible.

• Crediting the estimated value of uncollectible accounts to a contra account.

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

• Analyzing accounts receivable according to when they are due.

What is the "Book value" of an asset?

• The amount of accounts receivable a company expects to collect.

• The interest earned on money loaned.

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

• The percentage of the principal that is due for the use of the funds secured by a note.

How is the "Book value of accounts receivable" determined?

• By adding the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts.

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

• By analyzing accounts receivable according to when they are due.

• By recording uncollectible accounts expense only when an amount is actually known to be uncollectible.

What does the "Direct write-off method" involve?

• Crediting the estimated value of uncollectible accounts to a contra account.

• Analyzing accounts receivable according to when they are due.

• Recording uncollectible accounts expense only when an amount is actually known to be uncollectible.

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

What is a "Dishonored note"?

• A note that is paid before due.

• A note that is paid when due.

• A note that is not paid when due.

• The amount that is due on the maturity date of a note.

What does "Interest income" represent?

• The percentage of the principal that is due for the use of the funds secured by a note.

• The amount that is due on the maturity date of a note.

• The interest earned on money loaned.

• The difference between the balance of Accounts Receivable and its contra account.

What is the "Interest rate" in the context of a note?

• The amount of accounts receivable a company expects to collect.

• The interest earned on money loaned.

• The percentage of the principal that is due for the use of the funds secured by a note.

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

Who is the "Maker of a note"?

• The person or business that receives the funds secured by a note.

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

• The person or business that is owed payment on the maturity date of a note.

• The person or business that records uncollectible accounts expense.

When is the "Maturity date" of a note?

• The date on which the interest of a note is to be paid.

• The date on which the principal of a note is due to be repaid.

• The date on which a note is signed by the maker.

• The date on which the accounts receivable are analyzed.