# "CLEP Financial Accounting," Vocabulary from Chapter 11﻿

This list focuses on other receivables.

Here are links to all the chapters of the test prep book published by Research & Education Association: Chapter 1, Chapter 2, Chapter 3, Chapter 4, Chapter 5, Chapter 6, Chapter 7, Chapter 8, Chapter 9, Chapter 10, Chapter 11, Chapter 12, Chapter 13, Chapter 14, Chapter 15, Chapter 16, Chapter 17, Chapter 18, Chapter 19, Chapter 20
25 words 17 learners

### Full list of words from this list:

1. discount
an amount or percentage deducted
2. proceeds
the income or profit arising from a transaction
3. future
effective in or looking toward time yet to come
4. value
the amount considered to be equivalent for something else
5. borrow
get temporarily
6. maturity
the date on which an obligation must be repaid
7. mature
become due for repayment
8. principal
the original amount of debt on which interest is calculated
9. loan
the temporary provision of money (usually at interest)
10. account
furnish a justifying analysis or explanation
11. analyze
make a mathematical, chemical, or grammatical study of
12. promissory
relating to a verbal commitment by one person to another
get something; come into possession of
14. default
fail to pay up
15. accrue
16. partial
being or affecting only a segment
17. deliver
relinquish possession or control over
18. difference
the number that remains after subtraction
19. guarantee
give surety or assume responsibility
20. recover
regain or make up for
21. average
an intermediate scale value regarded as normal or usual
22. ratio
the relative magnitudes of two quantities
The acid test ratio formula is the same as the quick ratio formula: quick assets (assets quickly changeable into cash) divided by current liabilities. A good number is 20%. Too low indicates a future difficulty in paying current bills.
23. formula
a statement expressing some fundamental principle
--A/R - allowance = net receivables
--beginning net A/R + ending net A/R divided by 2 = average net A/R
--average net A/R divided by one day's sales = days' sales in A/R
--net sales on account divided by 365 days = one day's sales
--future value of the note x discount % x years (or fraction thereof) = discount
--loan amount (principal) x rate% x years (or fraction thereof) = interest
--future value - discount = proceeds
24. principle
a rule or standard especially of good behavior
The Present Value Principle requires notes to be shown at their present value. When given a future value, GAAP requires that the interest be backed out. When given a non-interest-bearing note (which has interest in the face amount), GAAP requires that the interest be backed out.
25. clue
evidence that helps to solve a problem
--Don't worry about calculating the interest. The CLEP exam will give you the present value.
--Don't count days on the CLEP exam unless the question asks you to do so. Months will do.
--Take no shortcuts! They are traps.
Created on November 2, 2016 (updated December 14, 2016)