81) Allowance for Doubtful Accounts is a contra account to short term investments.
82) The allowance method of accounting for bad debts records collection losses on the basis of estimates rather than waiting to determine which customers will not pay.
83) Under the allowance method, the entry to write off an account that has been deemed uncollectible has no impact on the net income of the firm.
84) Many companies use both the percentage-of-sales and the aging method to establish their allowance for doubtful accounts.
85) There are two basic ways to estimate uncollectible receivables: the percentage-of-sales method and the aging-of-receivables method.
86) When estimating uncollectible receivables based on the percentage-of-sales method, the adjusting entry will include a credit to Accounts Receivable.
87) The principal amount of a note plus the interest due at the maturity date is equal to the note's maturity value.
88) The payee of the note records interest on a note receivable as interest expense.
89) Factoring receivables involves selling them at a discounted price.
90) Not all companies want speedy cash receipts.