ALLOWANCE FOR NOTES RECEIVABLE LOSSES Definition

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ALLOWANCE FOR NOTES RECEIVABLE LOSSES is an account maintained at a level considered adequate to provide for probable losses. The provision is increased by amounts charged to earnings and reduced by net charge-offs. The level of allowance is based on management's evaluation of the portfolio, which takes into account prevailing and anticipated business and economic conditions and the net realizable value of securities held.

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YEAR-END ADJUSTMENT is the process of adjusting the entry to an account at the end of the calendar or fiscal year in order to properly state it for financial statement preparation purposes. The various  required adjustments include accrual or deferral of a revenue or expense item, reclassification, to conform book figures to physical inventory counts, and reflecting unusual transactions.

PERIODICITY CONCEPT is the concept that each accounting period has an economic activity associated with it, and that the activity can be measured, accounted for, and reported upon.

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