ACCTG 201 Vocabulary Midterm 2
Sales allowance
A customer receives a partial refund of the sales price after the customer discovers a flaw in the merchandise. The customer keeps the merchandise
Sales return
A customer returns merchandise purchased during the month and receives a refund of the full sales prices
Net realizable value of accounts receivable is the
Amount of cash the firm expects to collect
Raven receives a 3 year note receivable from a customer for goods sold. How should Raven report this note receivable in its financial statements?
As a non current asset
Sales to customers in which the customers pay within 30 to 60 days are referred to as
Credit sales Sales on account
Which of the following are classified as receivables?
Loans by a company to other entities Interest due from loans to customers
Two entries are required when a previously written off account is paid
Record the collection on the account receivable Reinstate the account receivable
Trade receivable is another term for _____ receivable
accounts
Accounts receivable are normally classified as
current assets
A sales allowance _____ the amount owed by the customer for merchandise that is _____ by the customer
increased; retained
When a company has earned interest in the current period but has not yet recorded the interest, what type of adjustment is the company required to make?
make adjusting entry at the end of the current period to accrue the interest earned
The allowance method estimates
uncollectible accounts
A calendar year end company that accepts a 3 month interest bearing note on Dec 1 must accrue _____ on Dec 31
interest