Ch 15 - AR and Uncollectibles VOCAB

Question 1

What is aging the accounts receivable?

Answer 1

Classifying accounts receivable balances according to how long they have been outstanding

Question 2

Define allowance method.

Answer 2

method of recording uncollectible accounts that estimates losses from uncollectible accounts and charges them to expense in the period when the sales are recorded

Question 3

Define direct charge-off method

Answer 3

method of recording uncollectible account losses as they occur

Question 4

Define valuation account.

Answer 4

an account, such as Allowance for Doubtful Accounts, whose balance is revalued or reappraised in light of reasonable expectations