Acct 229: Chapter 7 Vocab.

Front 1

Account Receivable

Back 1

A receivable arising from the sale of goods or service with a verbal promise to pay.

Front 2

Subsidiary Ledger

Back 2

The detail for a number of individual items that collectively make up a single general ledger account.

Front 3

Control Account

Back 3

The general ledger account that is supported by a subsidiary ledger.

Front 4

Direct Write-Offs Method

Back 4

The recognition of bad debts expense at the point an account is written off as uncollectible.

Front 5

Allowance Method

Back 5

A method of estimating bad debts on the basis of either the net credit sales of the period or the accounts receivable at the end of the period.

Front 6

Allowance For Doubtful Accounts

Back 6

A contra-asset account used to reduce accounts receivables to its net realizable value.
-Allowance for collectible accounts.

Front 7

Aging Schedule

Back 7

A form used to categorize the various individual accounts receivable according to the length of time each has been outstanding.

Front 8

Promissory Note

Back 8

A written promise to repay a definite sum of money on demand or at a fixed or determinable date in the future.

Front 9

Maker

Back 9

The party that agrees to repay the money for a promissory note at some future date.

Front 10

Payee

Back 10

The party that will receive the money from a promissory note at some future date.

Front 11

Note Receivable

Back 11

An asset resulting from the acceptance of a promissory note from another company.

Front 12

Note Payable

Back 12

A liability resulting from the signing of a promissory note.

Front 13

Principal

Back 13

The amount of cash received, or the fair value of the products or services received, by the maker when a promissory note is issued.

Front 14

Maturity Date

Back 14

The date the promissory note is due.

Front 15

Term

Back 15

The length of time a note is outstanding, that is, the period of time between the date t is issued and the date it matures.

Front 16

Maturity Value

Back 16

The amount of cash the maker is to pay the payee on the maturity coat of the note.

Front 17

Interest

Back 17

The difference between the principal amount of the note and its maturity value.

Front 18

Credit Card Draft

Back 18

A multiple-copy document used by a company that accepts a credit card for a sale.
-Also known as an invoice

Front 19

Discounting

Back 19

The process of selling a promissory note.

Front 20

Equity Securities

Back 20

Securities issued by corporations as a form of ownership in the business.
-Also known as stocks

Front 21

Debt Securities

Back 21

Securities issued by corporations and governmental bodies as a form of borrowing.
-Also known as bonds