Match the terms with the definitions.
-The amount a business expects to collect from its accounts receivable; calculated as Accounts Receivable less Allowance for Bad Debts.
A)aging the receivables
B)allowance method
C)bad debt expense
D)direct write-off method
E)matching principle
F)net receivables
G)percentage of receivables method
H)percentage of sales method

Question

Quizplus · Accepted Answer

Net receivables are the amount a business expects to collect from its accounts receivable, calculated as accounts receivable less allowance for bad debts.

Answer: B
 The allowance method is a method of accounting for bad debts where businesses estimate the amount of bad debt expense based on an aging of the receivables, and create an allowance account to reduce the value of accounts receivable to their estimated net realizable value.

Answer: C
 Bad debt expense is the amount of expense recognized for accounts receivable that are expected to be uncollectible.

Answer: D
 The direct write-off method is a method of accounting for bad debts where businesses recognize bad debt expense only when accounts receivable actually become uncollectible.

Answer: E
 Matching principle is an accounting principle that requires businesses to recognize expenses in the same period as the revenues they help to generate.

Answer: A
 Aging the receivables is a method of estimating the allowance for bad debts that involves analyzing accounts receivable by how long they have been outstanding.

Answer: G
 The percentage of receivables method is a method of estimating the allowance for bad debts by applying a percentage to the amount of accounts receivable.

Answer: H
 The percentage of sales method is a method of estimating the bad debt expense by applying a percentage to the amount of credit sales during the period.

Match the Terms with the Definitions