Match the Term and Its Definition

question 103

Multiple Choice

Match the term and its definition.There are more definitions than terms.
-Percentage of Credit Sales Method

• A)The process of removing specific customers' accounts deemed uncollectible.
• B)When a company increases the amount of accounts receivable by adding the interest earned as accounts age without being collected.
• C)How much money you can expect to earn over a period of time selling your goods.
• D)Selling accounts receivable to another company for immediate cash.
• E)Credit that a company receives when one good is exchanged for another.
• F)Also known as net accounts receivable.
• G)The length of the credit period and any discounts offered for prompt payment.
• H)The amount of money lent.
• I)A method of estimating uncollectible debts by forecasting the probability of not collecting late accounts.
• J)The interest earned by money over a period of time.
• K)A method of estimating uncollectible debts by looking at the historical average of credit sales not collected.
• L)The account in which the estimated amount of accounts receivable expected to be uncollectible is recorded.

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Definitions:

Raw Materials Purchase

The procurement of unprocessed materials used in the manufacturing or production of finished goods.

Retained Earnings

Profits that a company has retained over time for reinvestment in its operations, rather than distributing to shareholders.

Standard Cost

A predetermined cost that serves as a benchmark for evaluating actual production costs.

Actual Prices

The real prices at which transactions have occurred, as opposed to estimated or standard prices.