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24 Cards in this Set
- Front
- Back
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Accounts Receivable
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Amounts owed by customers that result from the sale of goods and services
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Notes Receivable
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Claims for which formal instruments of credit are issued as proof of debt.
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Direct Write Off method of valuing Receivables
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Theoretically undesirable:
-no matching. -receivable not stated at net realizable value. -not acceptable for financial reporting. |
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Allowance method of valuing receivables
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Losses are estimated:
-better matching. -receivable stated at net realizable value. -required by GAAP. |
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Net Cash Realizable Value
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Accounts Receivable - Allowance for doubtful
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Cash Realizable Value
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The net amount a company expects to recieve in cash
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Allowance method (Def)
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A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period
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Direct Write-off Method (Def)
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A method of accounting for bad debts that involves expensing accounts at the time they are determined to be uncollectible
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Bases Used for Allowance method: % of sales
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Sales <-> Bad Debt Expenses
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Bases Used for Allowance method: % of recievables
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Accounts Receivable <-> Allowance for doubtful accounts
(Aging Schedule) |
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Maturity Date
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Note expressed in months or days
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Computing Interest
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Face Value of note X Annual interest rate X Time in terms of One year
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Depreciation
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is the process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset.
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Factors in computing depreciation
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Cost, Useful Life, Salvage Value
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Straight Line Depreciation
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Cost - Salvage Value = Depreciation Cost
Depreciable Cost / Useful life in years = Annual Depreciation Expense |
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Units of Activity Depreciation
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Depreciable Cost / Total Units of Activity = Depreciation Cost per unit
Depreciable Cost per unit X Units of activity during the year = Annual Depreciable Expense |
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Journal Entry to Record Depreciation
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ALWAYS GOING TO BE : Depreciation Expense
Accumulated Depreciation |
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Accumulated Depreciation
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Shows the total amount of depreciation that the company has expensed thus far in the assets life
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Book Value
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Original Cost - Accumulated Depreciation
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Ordinary Repairs
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expenditures to maintain the operating efficiency and productive life of the unit.
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Capital Expenditures
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costs incurred to increase the operating efficiency, productive capacity, or useful life of a plant asset.
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Journal Entry: Retirement
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Accumulated Depreciation
Loss on Disposal Equipment |
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Depletion
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The allocation of the cost of a naturaul resource to expense in a rational and systematic manner over the resources useful life
-Uses Units of Activity Method |
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Intangibles
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are rights, privileges, and competitive advantages that do not possess physical substance.
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