Receivable terms (Learning Objectives 3 & 4) 5–10 min.

Match the term with its definition by placing the corresponding letter in the space provided:

c Example: Amounts owed to a business by another business or individual _____ 1. A contra-account, related to accounts receivable, that holds the estimated amount of uncollectible receivables.

_____ 2. A method of accounting for uncollectible receivables in which the company waits until a specific customer’s account receivable is uncollectible before recording bad debt expense.

_____ 3. A method of recording receivable losses on the basis of estimates instead of waiting to see which customers the company will not collect from.

_____ 4. The party to a credit transaction who sells goods or a service and obtains a receivable.

_____ 5. A way to estimate uncollectible accounts by analyzing individual accounts receivable according to the length of time they have been receivable.

_____ 6. The party to a credit transaction who makes a purchase and has a payable.

_____ 7. Cost to the seller of credit sales; arises from the failure to collect from credit customers.

_____ 8. A method of estimating uncollectible receivables that calculates bad debt expense based on net credit sales.

a. Creditor

b. Debtor

c. Receivables

d. Bad Debt Expense

e. Allowance method

f. Allowance for Uncollectible Accounts g. Percent of sales method h. Aging method i. Direct write-off method AppendixLO1