Cash Equivalents - Include highly liquid investments
Allowance for Uncollectibles - Estimate of bad debts
Cash Discount - Reduction in amount paid by credit customer
Balance Sheet Approach - Bad debt expense determined by estimating realizable value
Income Statement Approach - Bad debt expense a % of credit sales
Net Method - Cash discount not taken is interest revenue
Compensating Balance - Restriction on cash
Discounting - Sale of note receivable to a financial institution
Gross Method - Cash discount not taken is sales revenue
Direct Write-Off Method - Recognizes bad debts as they occur
Factoring - Sale of receivables to a financial institution
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