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22 Cards in this Set
- Front
- Back
Accounts receivable
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Receivables created by selling merchandise or services on credit.
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Aging the receivables
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The process of analyzing the accounts receivable and classifying them according to various age groupig, with the due date being the base point for determining age.
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Allowance for doubtful accounts
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The contra asset accounts receivable.
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Allowance method
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The method of accounting for uncollectible accounts that provides an expense for uncollectable receivables in advance of their write-off.
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Average inventory cost flow method
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The method of inventory costing that is based upon the assumption that costs should be charred against revenue by using the weighted average unit cost of the items sold.
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Bad debt expense
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The operating expense incurred because of the failure to collect receivables.
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Cost of goods sold
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The cost of the manufactured product sold.
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Direct write-off method
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The method of accounting for uncollectible accounts that recognizes the expense only when accounts are judged to be worthless.
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Finished goods inventory
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The cost of finished products on hand that have not been sold.
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First in, first-out (FIFO) inventory method
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A method of inventory costing based on the assumption that the costs of merchandise sold should becharged against revenue in the order in which the costs were incurred.
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Last-in, first-out (LIFO) inventory method
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A method of inventory costing based on the assumption that the most recent merchandise inventory costs should be charged against revenue.
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LIFO conformity rule
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A financial reporting rule requiring a firm that elects to use LIFO inventory valuation for tax purposes to also use LIFO for external financial reporting.
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LIFO reserve
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A required disclosure for LIFO firms, showing the difference between inventory valued under FIFO and inventory valued under LIFO.
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Lower-of-cost-or-market (LCM) method
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A method of valuing inventory that reports the inventory at the lower of its cost or current marker value (replacement cost).
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Materials inventory
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The cost of materials that have not yet entered into the manufacturing process.
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Maturity value
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The amount that is due at the maturity or due date of a note.
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Merchandise inventory
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Merchandise on hand (not sold) at the end of an accounting period.
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Net realizable value
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For a receivable, the amount of cash expected to be realized in the future. For inventory, the estimated selling price of an item of inventory less any direct costs of disposal, such as sales commissions.
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Notes receivable
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Written claims against debtors who promise to pay the amount of the note plus interest at an agreed upon rate.
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Receivables
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All money claims against other entities, including people, business firms, and other organizations.
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Specific identification inventory cost flow method
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An inventory cost flow method where the cost of each inventory unit is separately identified.
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Work-in-process (WIP) inventory
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The direct materials costs, the direct labor costs, and the factory overhead costs that have entered into the manufacturing process but are associated with products that have not been finished.
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