Chapter 8: Reporting and Analyzing Receivables

Flashcards covering key terms and concepts related to reporting and analyzing receivables from the lecture notes.

Receivables

Amounts owed to a company by customers, employees, and others.

Accounts Receivable

Amounts owed by customers resulting from the sale of goods and services.

Notes Receivable

A formal credit instrument that requires the payment of interest and extends for more than 30 days.

Allowance for Doubtful Accounts

A contra asset account used to estimate uncollectible accounts.

Bad Debts Expense

Recognized in the same period that the related sales revenue is reported.

Subsidiary Ledger

A group of accounts sharing a common characteristic; in this case, accounts receivable.

Trade Receivables

Another term for accounts receivable and notes receivable.

Write-Off

Recording an account as no longer collectible.

Recovery of Bad Debt

Reinstating a previously written-off account when it is collected.

Receivables Turnover Ratio

Measures the number of times, on average, that receivables are collected during a year.

Estimated Inventory Returns

Expected returns deducted from sales to adjust accounts receivable.

Interest Receivable

Interest earned on notes receivable that has not yet been collected.