Q1TI - Horngren'S Financial And Managerial Accounting

Question

Match the accounting terminology to the definitions.

1. Factoring receivables a. A monetary claim against a business or an individual.

2. Debtor b. The party to a transaction who takes on an obligation/payable.

3. Accounts receivable c. Using receivables as security (collateral) for a loan.

4. Maturity date d. The right to receive cash in the future from customers for goods sold or for services provided.

5. Receivable e. The date when a note is due.

6. Pledging receivables f. Selling receivables to a finance company or bank.

Step-by-Step Solution

Answer

The debtor is matched with the fourth option.

Step 1: Definition of the receivable

The receivable is a term used to claim an amount of money against a party.

Step 2: Accounting terminology

Accounting terminology Definition Factoring Receivables f. Factory receivables are the receivable when the company sells its receivables to the bank. Debtor b. Debtor is a party who takes the obligation to pay later. Accounts Receivable d. Account receivable is the right to receive cash in the future from the customers for goods sold. Maturity Date e. Maturity date is the date at which the note is due. Receivable Receivable is a monetary claim against a business or individual. Pledging Receivables c. In the pledging receivable, the company uses receivables as loan security.