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acct 1235 > ch 8 terms > Flashcards

ch 8 terms Flashcards

1
Q

accounts receivable characteristics

A

owed by customer for sale
30-60 day collectible
“trades receivable”
no interest

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2
Q

notes receivable characteristics

A

formal credit tool for money lending
longer term than AR
interest

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3
Q

other receivables characteristics

A

non-trade receivables from not normal business OPS
interest, sales tax recovery, income tax
loans and advances employees

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4
Q

what is subsidiary ledger

A

all receivable accounts in more detail
AR in general ledger is control acct

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5
Q

what is AFDA

A

allowance for doubtful accounts
some customers won’t pay
contra asset account opposite AR

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6
Q

what is bad debt expense

A

predicted credit losses account

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7
Q

AFDA and bad debts JE

A

recognized in same period as rev reported

bad debts exo
AFDA

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8
Q

what is AR carrying amount

A

AR - credit losses
aka real AR

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9
Q

what are write offs

A

get rid of AFDA because we know we will never receive that money
authorized by CFO

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10
Q

write off JE

A

AFDA
AR

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11
Q

what are recoveries

A

reversing write off when payment received

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12
Q

recovery JE

A
  1. AR
    AFDA
  2. cash
    AR
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13
Q

what is promissory note

A

written promise to pay on demnad

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14
Q

notes receivable JE

A

Notes receivable
AR

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15
Q

calculating interest

A

principal x annual interest x time (in terms of years)
paid at maturity but accrued during term of note

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16
Q

interest income JE

A

interest receivable
interest income

17
Q

derecognizing honoured notes receivable

A

collected.
cash
notes receivable
interest receivable

18
Q

de recognizing dishonoured notes receivable if expected

A

not collected.
AR
notes receivable
interest receivable

19
Q

derecognizing dishonoured notes receivable if collection NOT expected

A

not collected.
credit losses
notes receivable
interest receivable

20
Q

derecognizing dishonoured notes receivable if collection NOT expected

A

not collected.
credit losses
notes receivable
interest receivable

21
Q

receivable turnover ratio definition

A

receivables collected in year

22
Q

average collection period ratio definition

A

average # receivables outstanding
lower better, more liquid

23
Q

average collection period ratio definition

A

average amount of time receivables outstanding
lower better, more liquid

acct 1235 (13 decks)

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