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Debtor
The party to a credit transaction who takes
on an obligation/payable.
Maturity Date
The date when a note is due.
Receivable
Accounts Receivable
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A monetary claim against a business or an
individual.
The right to receive cash in the future from
customers for goods sold or for services
performed.
Notes Receivable
Bad Debts Expense
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A written promise that a customer will pay
a fixed amount of principal plus interest by
a certain date in the future.
The cost to the seller of extending credit. It
arises from the failure to collect from some
credit customers.
Direct Write-off Method
Allowance for Bad Debts
3/2/2020 Miller-Nobles, Horngren’s Financial & Managerial Accounting, 6/e
A method of accounting for uncollectible
receivables in which the company records
A contra asset account, related to accounts
receivable, that holds the estimated
