Question

Match the descriptions below with the correct answer, using the letter codes shown in the table below. (8 points)

A. Realizable value

B. Percentage of receivables method

C. 1/10, n/60

D. FOB shipping point

E. Aging of receivables

F. Direct write-off method

G. Operating cycle

H. Specific identification method

I. Bad debt Expense

J. Percentage of sales method

K. Permanent accounts

L. 2/10, EOM

M. Time period assumption

N. n/10 EOM

O. 2/10, n/30

P. FOB destination

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Abdul-Rahim Taysir

Answer 1

Answer is as follows:

1. The Economic Life of a business should be divided into -  M. Time Period Assumption

2. Shipping terms that would typically mean that the seller has to pay the freight charges - P. FOB destination

3. Analysis of customer account balances by length of time they have been unpaid - E. Aging of receivables

4. The net amount expected to be received in cash from - A. Realizable value

5. A method used to approximate uncollectible accounts which results in better matching of expenses and revenues -  J. Percentage of sales method

6. The average time that it takes to go from a cash to cash in producing revenues - G. Operating cycle

7. Credit terms that allow for a 2% discount if paid within first 10 days from the purchase date - O. 2/10, n/30

8. Tracks the actual physical flow for each inventory item available for sale - H. Specific identification method