What is the definition of receivable? What is the most common term used around the accounts receivable area? You can find accounting terms and definitions around the topic, here.

  • Accounts receivable – Amounts owed by customers on account.
  • Receivables – Amounts due from individuals and other companies.
  • Accounts receivable (customers’) subsidiary ledger – A subsidiary ledger that collects transaction data of individual customers.
  • Accounts receivable turnover ratio – A measure of the liquidity of accounts receivable; computed by dividing net credit sales by average net accounts receivable.
  • Aging the accounts receivable – The analysis of customer balances by the length of time they have been unpaid.
  • Allowance method – A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period.
  • Average collection period – The average amount of time that a receivable is outstanding; calculated by dividing 365 days by the accounts receivables turnover ratio.
  • Bad Debts Expense – An expense account to record uncollectible receivables.
  • Cash (net) realizable value – The net amount a company expects to receive in cash.
  • Direct write-off method – A method of accounting for bad debts that involves expensing accounts at the time they are determined to be uncollectible.
  • Dishonored note – A note that is not paid in full at maturity.
  • Factor – A finance company or bank that buys receivables from businesses and then collects the payments directly from the customers.
  • Maker – The party in a promissory note who is making the promise to pay.
  • Notes receivable – Claims for which formal instruments of credit are issued as proof of the debt.
  • Other receivables – Various forms of nontrade receivables, such as interest receivable and income taxes refundable.
  • Payee – The party to whom payment of a promissory note is to be made.
  • Percentage-of-receivables basis – Management estimates what percentage of receivables will result in losses from uncollectible accounts.
  • Percentage-of-sales basis – Management estimates what percentage of credit sales will be uncollectible.
  • Promissory note – A written promise to pay a specified amount of money on demand or at a definite time.
  • Trade receivables – Notes and accounts receivable that result from sales transactions.