(See related pages)
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| Accounts receivable | Amounts due from customers for credit sales. Also referred to as trade receivables. (See page(s) 518) |
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| Accounts receivable approach | A method of estimating bad debts using balance sheet relations. Also known as balance sheet approach. (See page(s) 526) |
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| Accounts receivable turnover | 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; computed by dividing credit sales (or net sales) by the average accounts receivable balance. (See page(s) 543) |
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| Aging analysis | See aging of accounts receivable. (See page(s) 527) |
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| Aging of accounts receivable | A process of classifying accounts receivable in terms of how long they have been outstanding for the purpose of estimating the amount of uncollectible accounts. (See page(s) 527) |
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| Allowance for Doubtful Accounts | A contra asset account with a balance equal to the estimated amount of accounts receivable that will be uncollectible; also called the Allowance for Uncollectible Accounts. (See page(s) 522) |
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| Allowance method of accounting for bad debts | An accounting procedure that (1) estimates and reports bad debt expense from credit sales during the period of the sales, and (2) reports accounts receivable as the amount of cash proceeds that are expected from their collection (their estimated realizable value). (See page(s) 521) |
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| Bad debts | The accounts of customers who do not pay what they have promised to pay; the amount is an expense of selling on credit; also called uncollectible accounts. (See page(s) 521) |
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| Balance sheet approach | See accounts receivable approach. (See page(s) 526) |
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| Contingent liability | An obligation to make a future payment if, and only if, an uncertain future event actually occurs. (See page(s) 542) |
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| Creditor | See payee. (See page(s) 533) |
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| Date of a note | The date on which interest begins to accrue. (See page(s) 533) |
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| Days' sales in receivables | See days' sales uncollected. (See page(s) 544) |
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| Days' sales uncollected | A measure of the liquidity of receivables computed by taking the balance of receivables and dividing by the credit (or net) sales over the year just completed, and then multiplying by 365 (the number of days in a year); also called days' sales in receivables. (See page(s) 544) |
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| Debtor | See maker of a note. (See page(s) 533) |
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| Direct write-off method | A method of accounting for bad debts that records the loss from an uncollectible account receivable at the time it is determined to be uncollectible; no attempt is made to estimate uncollectible accounts or bad debt expense. (See page(s) 529) |
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| Dishonouring a note receivable | When a note's maker is unable or refuses to pay at maturity. (See page(s) 536) |
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| Due date of a note | See maturity date. (See page(s) 533) |
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| Factor | The buyer of accounts receivable. (See page(s) 541) |
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| Honouring a note receivable | When the maker of the note pays the note in full at maturity. (See page(s) 536) |
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| Income statement approach | See percent of sales approach. (See page(s) 525) |
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| Interest | The charge for using (not paying) money until a later date. (See page(s) 533) |
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| Maker of a note | One who signs a note and promises to pay it at maturity. (See page(s) 533) |
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| Maturity date of a note | The date on which a note and any interest are due and payable. (See page(s) 533) |
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| Non-bank credit card | A card for which the retailer mails the credit card sales receipts and awaits payment from the credit-granting agency, which is not a bank. (See page(s) 520) |
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| Note receivable | See short-term note receivable. (See page(s) 533) |
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| Payee of a note | The one to whom a promissory note is made payable. (See page(s) 533) |
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| Percent of accounts receivable approach | An approach to estimating bad debts that assumes a percent of outstanding receivables is uncollectible. (See page(s) 526) |
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| Percent of sales approach | Uses income statement relations to estimate bad debits. Also known as the income statement approach. (See page(s) 525) |
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| Period of a note | The time from the date of the note top its maturity date or due date. (See page(s) 533) |
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| Principal of a note | The amount that the signer of a promissory note agrees to pay back when it matures, not including the interest. (See page(s) 533) |
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| Promissory note | A written promise to pay a specified amount of money either on demand or at a definite future date. (See page(s) 533) |
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| Realizable value | The expected proceeds from converting assets into cash. (See page(s) 522) |
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| Short-term note receivable | A promissory note that becomes due within the next 12 months or within the business's operating cycle if greater than 12 months. (See page(s) 533) |
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| Trade receivables | See accounts receivable. (See page(s) 518) |
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| Uncollectible accounts | See bad debts. (See page(s) 521) |