Match each description to the appropriate term (a-i).
-A receivable created from selling merchandise or services on account
A)Accounts receivable turnover
B)Net realizable value
C)Accounts receivable
D)Aging the receivables
E)Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Notes receivable

Question

Quizplus · Accepted Answer

Accounts receivable are receivables created from selling merchandise or services on account.

Answer: B
 Net realizable value is the amount of accounts receivable that is expected to be collected and is calculated by subtracting the allowance for doubtful accounts from the total accounts receivable.

Answer: E
 Receivables refer to any amounts owed to a business, including accounts receivable and notes receivable.

Answer: D
 Aging the receivables involves separating the accounts receivable into different categories based on how long they have been outstanding, which helps the business track and manage collections.

Answer: I
 Notes receivable are written promises from customers to pay the business a certain amount at a specified time in the future.

Answer: A
 Accounts receivable turnover is a ratio that measures how quickly a business is able to collect on its accounts receivable.

Answer: F
 The direct write-off method is a method of accounting for bad debts that involves waiting until a specific account is deemed uncollectible before writing it off as a loss.

Answer: G
 The allowance for doubtful accounts is a contra asset account that is used to reduce the reported amount of accounts receivable to its estimated net realizable value.

Answer: H
 Bad debt expense is the expense incurred by a business when a customer is unable to pay its accounts receivable and they are written off as uncollectible.

Match Each Description to the Appropriate Term (A-I)