| Accounts receivable | Amounts due from customers for credit sales; backed by the customer's general credit standing.
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| Accounts receivable turnover | Measure of both the quality and liquidity of accounts receivable; indicates how often receivables are received and collected during the period; computed by dividing net sales by average accounts receivable.
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| Aging of accounts receivable | Process of classifying accounts receivable by how long they are past due for purposes of estimating uncollectible accounts.
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| Allowance for Doubtful Accounts | Contra asset account with a balance approximating uncollectible accounts receivable; also called Allowance for Uncollectible Accounts.
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| Allowance method | Procedure that (a) estimates and matches bad debts expense with its sales for the period and/or (b) reports accounts receivable at estimated realizable value.
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| Bad debts | Accounts of customers who do not pay what they have promised to pay; an expense of selling on credit; also called uncollectible accounts.
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| Direct write-off method | Method that records the loss from an uncollectible account receivable at the time it is determined to be uncollectible; no attempt is made to estimate bad debts.
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| Matching principle | Prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses.
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| Materiality constraint | Prescribes that accounting for items that significantly impact financial statement and any inferences from them strictly adhere to GAAP.
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| Periodic inventory system | Method that records the cost of inventory purchased but does not continuously track the quantity available or sold to customers; records are updated at the end of each period to reflect the physical count and costs of goods available.
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| Realizable value | Expected proceeds from converting an asset into cash.
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