Matching
Match the following definitions with the appropriate terms
Premises:
The accounting constraint that states that an amount can be ignored if its effect on the financial statements is not important to their users.
Amounts owed by customers from credit sales for which payment is required in periodic payments over an extended period of time.
A buyer of accounts receivable who charges the seller a fee and then receives cash from the receivables as they come due.
A method of accounting for bad debts that matches the estimated loss from uncollectible accounts receivable against the sales they helped to produce.
The accounting principle that requires the financial statements (including the notes) to report all relevant information about operations and financial condition.
A method of accounting for bad debts that records the loss from an uncollectible account receivable when it is determined to be uncollectible.
One who signs a note and promises to pay it at maturity.
The amount that the signer of a note agrees to pay back when the note matures, not including interest.
Refers to a note maker’s inability or refusal to pay the note at maturity.
A measure of both the quality and liquidity of accounts receivable. It indicates how often, on average, receivables are received and collected during the period.
Responses:
Accounts receivable turnover
Installment accounts receivable
Materiality constraint
Dishonoring a note
Allowance method
Factor
Full disclosure principle
Maker of a note
Direct write-off
Principal of a note
Correct Answer:
Premises:
Responses:
The accounting constraint that states that an amount can be ignored if its effect on the financial statements is not important to their users.
Amounts owed by customers from credit sales for which payment is required in periodic payments over an extended period of time.
A buyer of accounts receivable who charges the seller a fee and then receives cash from the receivables as they come due.
A method of accounting for bad debts that matches the estimated loss from uncollectible accounts receivable against the sales they helped to produce.
The accounting principle that requires the financial statements (including the notes) to report all relevant information about operations and financial condition.
A method of accounting for bad debts that records the loss from an uncollectible account receivable when it is determined to be uncollectible.
One who signs a note and promises to pay it at maturity.
The amount that the signer of a note agrees to pay back when the note matures, not including interest.
Refers to a note maker’s inability or refusal to pay the note at maturity.
A measure of both the quality and liquidity of accounts receivable. It indicates how often, on average, receivables are received and collected during the period.
Premises:
The accounting constraint that states that an amount can be ignored if its effect on the financial statements is not important to their users.
Amounts owed by customers from credit sales for which payment is required in periodic payments over an extended period of time.
A buyer of accounts receivable who charges the seller a fee and then receives cash from the receivables as they come due.
A method of accounting for bad debts that matches the estimated loss from uncollectible accounts receivable against the sales they helped to produce.
The accounting principle that requires the financial statements (including the notes) to report all relevant information about operations and financial condition.
A method of accounting for bad debts that records the loss from an uncollectible account receivable when it is determined to be uncollectible.
One who signs a note and promises to pay it at maturity.
The amount that the signer of a note agrees to pay back when the note matures, not including interest.
Refers to a note maker’s inability or refusal to pay the note at maturity.
A measure of both the quality and liquidity of accounts receivable. It indicates how often, on average, receivables are received and collected during the period.
Responses:
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