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Definition of Accounts receivable
A current asset on the balance sheet, representing short-term
Amounts due from customers for sales on open account, not evidenced
Amounts owed to a company by customers that it sold to on credit. Total accounts receivable are usually reduced by an allowance for doubtful accounts.
Amounts owed to the company, generally for sales that it has made.
Money owed by customers.
Money owed to a business for merchandise or services sold on open account.
Short-term, non-interest-bearing debts owed to a
The number of days it would take to collect the ending
The ratio of net credit sales to average accounts receivable, a measure of how
A ratio computed by dividing annual
The weighted-average age of all of the firm's outstanding invoices.
Short-term financing in which accounts receivable are used as collateral to secure a loan. The lender does not buy the accounts receivable but simply uses them as collateral for the loan. Also called pledging of accounts receivable.
Revenue recognized under the percentage-of-completion
A ratio that shows how well a company could pay its current debts using only its most liquid or “quick” assets. It’s a more pessimistic—but also realistic—measure of safety than the current ratio, because it ignores sluggish, hard-toliquidate current assets like inventory and notes receivable. Here’s the formula:
The sum of cash, accounts receivable, and short-term marketable
A table of accounts receivable broken down into age categories (such as 0-30 days, 30-60
Classification of accounts receivable by time outstanding.
An offset to the accounts receivable balance, against which
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
An estimate of the uncollectible portion of accounts receivable
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
Average number of days necessary to receive cash for the sale of
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
The amount of accounts receivable that is not expected to be collected.
Refers to accounts receivable from credit sales to customers
Cash conversion cycle
The length of time between a firm's purchase of inventory and the receipt of cash
The length of time between a purchase of materials and collection of accounts receivable generated by the sale of the products made from the materials.
cash flow from operating activities, or cash flow from profit
This equals the cash inflow from sales during the period minus the cash
An internal department within a company staffed by specialists in collecting past due accounts or accounts receivable.
Procedures followed by a firm in attempting to collect accounts receivables.
Typically the cash, accounts receivable, and inventory accounts on the
Value of cash, accounts receivable, inventories, marketable securities and other assets that
Cash, things that will be converted into cash within a year (such as accounts receivable), and inventory.
Current refers to cash and those assets that will be turned
Measures the number days' worth of sales in accounts receivable (accounts receivable
Direct write-off method
A method of adjusting accounts receivable to the amount that is expected to be collected by eliminating the account balances of specific nonpaying customers.
A financial institution that buys a firm's accounts receivables and collects the debt.
Sale of a firm's accounts receivable to a financial institution known as a factor.
The sale of accounts receivable to a third party, with the third party bearing
The discounting, or sale at a discount, of receivables on a nonrecourse, notification
Type of financial service whereby a firm sells or transfers title to its accounts receivable to a factoring company, which then acts as principal, not as agent.
mark to market
Refers to the accounting method that records increases
Factoring arrangement that provides collection and insurance of accounts receivable.
NUMBER OF DAYS SALES IN RECEIVABLES
(also called average collection period). The number of days of net sales that are tied up in credit sales (accounts receivable) that haven’t been collected yet.
Factoring arrangement that provides collection, insurance, and finance for accounts receivable.
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
Provision for Doubtful Accounts
An operating expense recorded when the allowance for
Any asset that can be converted into cash on short notice. This is a subset
The simple ratio of a company's liquid assets to current liabilities. Such assets include cash, marketable securities, and accounts receivable.
Receivables balance fractions
The percentage of a month's sales that remain uncollected (and part of
Receivables turnover ratio
Total operating revenues divided by average receivables. Used to measure how
A special, nonrecurring charge taken in conjunction with a consolidation
An inflow of cash, accounts receivable, or barter from a customer in exchange
Short-term solvency ratios
Ratios used to judge the adequacy of liquid assets for meeting short-term
Funds invested in a company's cash, accounts receivable and inventory. Net working capital is current assets minus current liabilities.
‘Buckets’ within the ledger, part of the accounting system. Each account contains similar transactions (line items) that are used for the production of financial statements. Or commonly used as an abbreviation for financial statements.
Money owed to suppliers.
Amounts a company owes to creditors.
Amounts owed by the company for goods and services that have been received, but have not yet been paid for. Usually accounts payable involves the receipt of an invoice from the company providing the services or goods.
Short-term, non-interest-bearing liabilities of a business
Acurrent liability on the balance sheet, representing short-term obligations
Amounts due to vendors for purchases on open account, that is, not evidenced
Accounts Payable Days (A/P Days)
The number of days it would take to pay the ending balance
Balance of Payments Accounts
A statement of a country's transactions with other countries.
Chart of accounts
A listing of all accounts used in the general ledger, usually sorted in
Days in receivables
Average collection period.
Special accounts where you can save and invest, and the taxes are deferred until money
National Income and Product Accounts
The national accounting system that records economic activity such as GDP and related measures.
Notes receivable are promissory notes that the company has accepted from its debtors. Most promissory notes pay interest. Those that are due within a year are shown under “Current Assets.” Those that mature in more than a year would be listed under “Long-term Assets.” If a note is being
Amounts owed to the company that have been formalized by a legal agreement called a note.
The accounts found on the Balance Sheet; these account balances are carried forward for the lifetime of the company.
The accounts found on the Income Statement and the Statement of Retained Earnings; these accounts are reduced to zero at the end of every accounting period.
Cost Plus Estimated Earnings in Excess of Billings
Revenue recognized to date under the percentage-of-completion method in excess of amounts billed. Also known as unbilled accounts
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts
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