Matching Quiz

Match the terms listed below, with the appropriate desciption from the list on the right.


1				Accounts receivable


2				Accounts receivable approach


3				Accounts receivable turnover


4				Aging of accounts receivable


5				Allowance for Doubtful Accounts


6				Allowance method of accounting for bad debts


7				Bad debts


8				Contingent liability


9				Date of a note


10				Days' sales uncollected


11				Direct write-off method


12				Dishonouring a note receivable


13				Factor


14				Honouring a note receivable


15				Interest


16				Maker of a note


17				Maturity date of a note


18				Non-bank credit card


19				Payee of a note


20				Percent of sales approach


21				Percent of accounts receivable approach


22				Period of a note


23				Principal of a note


24				Promissory note


25				Realizable value


26				Short-term note receivable

Answer choices for questions 1 through 26

A)	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. (p. 521)
B)	The date on which interest begins to accrue. (p. 533)
C)	The amount that the signer of a promissory note agrees to pay back when it matures, not including the interest. (p. 533)
D)	An obligation to make a future payment if, and only if, an uncertain future event actually occurs. (p. 542)
E)	A method of estimating bad debts using balance sheet relations. Also known as balance sheet approach. (p. 526)
F)	The buyer of accounts receivable. (p. 541)
G)	The one to whom a promissory note is made payable. (p. 533)
H)	The time from the date of the note top its maturity date or due date. (p. 533)
I)	Uses income statement relations to estimate bad debits. Also known as the income statement approach. (p. 525)
J)	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. (p. 543)
K)	When a note's maker is unable or refuses to pay at maturity. (p. 536)
L)	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. (p. 520)
M)	A written promise to pay a specified amount of money either on demand or at a definite future date. (p. 533)
N)	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. (p. 522)
O)	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. (p. 544)
P)	The charge for using (not paying) money until a later date. (p. 533)
Q)	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. (p. 529)
R)	The date on which a note and any interest are due and payable. (p. 533)
S)	When the maker of the note pays the note in full at maturity. (p. 536)
T)	One who signs a note and promises to pay it at maturity. (p. 533)
U)	Amounts due from customers for credit sales. Also referred to as trade receivables. (p. 518)
V)	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. (p. 527)
W)	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). (p. 521)
X)	An approach to estimating bad debts that assumes a percent of outstanding receivables is uncollectible. (p. 526)
Y)	The expected proceeds from converting assets into cash. (p. 522)
Z)	A promissory note that becomes due within the next 12 months or within the business's operating cycle if greater than 12 months. (p. 533)

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