Explain how the revenue recognition and expense recognition principles (chapters 2 and 3) work within the concept of accrual accounting.

What is a disadvantage of a seller using a cash-only policy? A benefit?

How do sellers benefit from accepting credit cards for purchases. What is a disadvantage?

What are three accounting issues associated with accounts receivable?

Why do companies sell goods and services on credit? What are advantages and disadvantages of selling on credit?

What does it mean to recognize accounts receivable? What are the basic entries associated with recognizing it?

What is bad debt expense? Describe it.

What are two methods for writing-off bad debt expense? Which is approved by GAAP?

What is the allowance method of accounting for bad debts?

In your own words, define cash (net) realizable value.

Describe the three essential features of the allowance method.

What is the allowance for doubtful accounts?

What does recovery of an uncollectible account mean?

What are the two methods for estimating an allowance?

Describe an aging schedule?

What is the normal balance for the account Allowance for Doubtful Accounts?

What is the formula for computing interest?