, Accounting 1 of 8 pages
Circle the letter of the Definition that corresponds to the displayed Term.
1. nontrade receivables
A: (often referred to as loans and receivables) are claims held against customers and others for
B: the most liquid of assets, is the standard medium of exchange and the basis for measuring
C: relate to loans made outside the normal course of business
D: a written promise to pay a certain sum of money at a specific future date
2. trade receivables
A: an amount owed by customers for bought or services rendered; either accounts receivable or
B: he amount of consideration that a company expects to receive from a customer in exchange
C: occurs when the lender is receiving more cash interest than it should be from the borrower,
D: interest rate based on the borrower’s economic cost of borrowing; referred to as the discount
3. net method
A: the amortization or writing off of any discount or premium over time and recognizes interest
B: sales and receivables are recorded at the net amount; recognizes the accounts receivable
C: the calculated rate between the future value divided by the present value of the note
D: this means that the factor assumes the credit-risk of some customers not paying their
4. factors
A: sales and receivables are recorded at the net amount; recognizes the accounts receivable
B: a company determines a particular account to be uncollectible, it charges the loss to Bad
C: percentage, that reflects an estimate of the uncollectible receivables
D: companies that buy receivables for a fee and then collect the payments directly from
5. receivables
A: valuation account; contra asset to notes receivable
B: occurs when the lender is receiving less cash interest than it should be from the borrower,
C: Stated Rate = Effective Rate
D: (often referred to as loans and receivables) are claims held against customers and others for
6. composite rate
A: sales and receivables are recorded at the net amount; recognizes the accounts receivable
B: the most liquid of assets, is the standard medium of exchange and the basis for measuring
C: requires companies to measure expected uncollectible accounts and record bad debt
D: percentage, that reflects an estimate of the uncollectible receivables
GoldenChapter – Stuvia 2024/2025 Edition
Circle the letter of the Definition that corresponds to the displayed Term.
1. nontrade receivables
A: (often referred to as loans and receivables) are claims held against customers and others for
B: the most liquid of assets, is the standard medium of exchange and the basis for measuring
C: relate to loans made outside the normal course of business
D: a written promise to pay a certain sum of money at a specific future date
2. trade receivables
A: an amount owed by customers for bought or services rendered; either accounts receivable or
B: he amount of consideration that a company expects to receive from a customer in exchange
C: occurs when the lender is receiving more cash interest than it should be from the borrower,
D: interest rate based on the borrower’s economic cost of borrowing; referred to as the discount
3. net method
A: the amortization or writing off of any discount or premium over time and recognizes interest
B: sales and receivables are recorded at the net amount; recognizes the accounts receivable
C: the calculated rate between the future value divided by the present value of the note
D: this means that the factor assumes the credit-risk of some customers not paying their
4. factors
A: sales and receivables are recorded at the net amount; recognizes the accounts receivable
B: a company determines a particular account to be uncollectible, it charges the loss to Bad
C: percentage, that reflects an estimate of the uncollectible receivables
D: companies that buy receivables for a fee and then collect the payments directly from
5. receivables
A: valuation account; contra asset to notes receivable
B: occurs when the lender is receiving less cash interest than it should be from the borrower,
C: Stated Rate = Effective Rate
D: (often referred to as loans and receivables) are claims held against customers and others for
6. composite rate
A: sales and receivables are recorded at the net amount; recognizes the accounts receivable
B: the most liquid of assets, is the standard medium of exchange and the basis for measuring
C: requires companies to measure expected uncollectible accounts and record bad debt
D: percentage, that reflects an estimate of the uncollectible receivables
GoldenChapter – Stuvia 2024/2025 Edition
