Net Accounts Receivable: Direct Write-off Method definitions Flashcards
Net Accounts Receivable: Direct Write-off Method definitions
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Bad Debt Expense
Loss recognized when amounts owed by customers from credit sales are determined to be uncollectible. Direct Write-off Method
Accounting approach where losses from uncollectible accounts are recorded only when specific accounts are deemed uncollectible. Matching Principle
Accounting guideline requiring expenses to be recorded in the same period as the revenues they help generate. Accounts Receivable
Amounts owed to a business by customers who purchased goods or services on credit. Credit Sale
Transaction where goods or services are provided to a customer with payment to be received at a later date. Revenue
Income earned from the sale of goods or services before any expenses are deducted. Uncollectible Account
Receivable that is determined to be impossible to recover from the customer. GAAP
Set of standardized accounting principles and guidelines used to ensure consistency and transparency in financial reporting. Income Statement
Financial report showing a company’s revenues and expenses over a specific period, resulting in net income or loss. Journal Entry
Formal accounting record documenting a business transaction’s financial impact on accounts. Debit
Accounting entry that increases assets or expenses, or decreases liabilities or equity. Credit
Accounting entry that increases liabilities or equity, or decreases assets or expenses. Net Accounts Receivable
Total receivables expected to be collected, after deducting amounts estimated to be uncollectible. Loss
Negative financial impact resulting from uncollected receivables or other unfavorable events. Financial Statement
Formal record summarizing the financial activities and position of a business at a specific point in time.
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