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Definition of Accounts
‘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
The number of days it would take to pay the ending balance
Money owed by customers.
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.
Short-term, non-interest-bearing debts owed to a
A current asset on the balance sheet, representing short-term
Amounts due from customers for sales on open account, not evidenced
Money owed to a business for merchandise or services sold on open account.
The number of days it would take to collect the ending
Accounts receivable turnover
The ratio of net credit sales to average accounts receivable, a measure of how
accounts receivable turnover ratio
A ratio computed by dividing annual
Allowance for doubtful accounts
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
Allowance for Doubtful Accounts
An estimate of the uncollectible portion of accounts receivable
Average age of accounts receivable
The weighted-average age of all of the firm's outstanding invoices.
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
Discounting of Accounts Receivable
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.
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.
The accounts found on the Balance Sheet; these account balances are carried forward for the lifetime of the company.
Provision for Doubtful Accounts
An operating expense recorded when the allowance for
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.
Unbilled Accounts Receivable
Revenue recognized under the percentage-of-completion
An equation that reflects the two-sided nature of a
The change in the value of a firm's foreign currency denominated accounts due to a
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
accrued expenses payable
The account that records the short-term, noninterest-
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:
acid test ratio (also called the quick ratio)
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.
The process of storing costs in one account and shifting them to other
Allowance for bad debts
An offset to the accounts receivable balance, against which
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
Assuris is a not for profit organization that protects Canadian policyholders in the event that their life insurance company should become insolvent. Their role is to protect policyholders by minimizing loss of benefits and ensuring a quick transfer of their policies to a solvent company where their benefits will continue to be honoured. Assuris is funded by the life insurance industry and endorsed by government. If you are a Canadian citizen or resident, and you purchased a product from a member life insurance company in Canada, you are protected by Assuris.
Average Collection Period
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
A “snapshot” statement that freezes a company on a particular day, like the last day of the year, and shows the balances in its asset, liability, and stockholders’ equity accounts. It’s governed by the formula:
One of the basic financial statements; it lists the assets, liabilities, and equity accounts of the company. The Balance Sheet is prepared using the balances at the end of a specific day.
book value and book value per share
Generally speaking, these terms
Breeder bill of materials
A bill of material that accounts for the generation and
A financial analyst employed by a non-brokerage firm, typically one of the larger money
That part of the balance of payments accounts that records demands for and supplies of a currency arising from purchases or sales of assets.
Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures
The value of assets that can be converted into cash immediately, as reported by a company. Usually
Cash and equivalents
The value of assets that can be converted into cash immediately, as reported by a
Cash conversion cycle
The length of time between a firm's purchase of inventory and the receipt of cash
In general, the time between cash disbursement and cash collection. In net working capital
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
Change in Accounting Estimate
A change in the implementation of an existing accounting
The entries that transfer the balances in the revenue, expense, and dividend accounts to Retained earnings and zero out the revenue, expense, and dividend accounts for the next period.
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.
A firm which buys and sells future contracts for customer accounts. Related: futures
the chief accountant (in a corporation) who is responsible
Cookie Jar Reserves
An overly aggressive accrual of operating expenses and the creation of
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
That part of the balance of payments accounts that records demands for and supplies of a currency arising from activities that affect current income, namely imports, exports, investment income payments such as interest and dividends, and transfers such as gifts, pensions, and foreign aid.
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
Amount owed for salaries, interest, accounts payable and other debts due within 1 year.
Current means that these liabilities require payment in
This is typically the accounts payable, short-term notes payable, and
Measures the number days' worth of sales in accounts receivable (accounts receivable
A market where traders specializing in particular commodities buy and sell assets for their
Checking accounts that pay no interest and can be withdrawn upon demand.
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.
accounts over which an individual or organization, other than the person in whose
The system of recording business transactions in two accounts.
Electronic depository transfers
The transfer of funds between bank accounts through the Automated
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.
FASB No. 52
The U.S. accounting standard which was replaced by FASB No. 8. U.S. companies are required
FASB No. 8
U.S. accounting standard that requires U.S. firms to translate their foreign affiliates' accounts by
Status of a firm's assets, liabilities, and equity accounts as of a certain time, as shown in its financial statement.
Land, buildings, plant, equipment, and other assets acquired for carrying on the business of a company with a life exceeding one year. Normally expressed in financial accounts at cost, less accumulated depreciation.
Foreign currency translation
The process of restating foreign currency accounts of subsidiaries into the
A book that contains all the accounts of the company and the balances of those accounts.
The master set of accounts that summarizes all transactions occurring
Idea that as long as individuals borrow (or lend) on the same terms as the firm, they can
One of the basic financial statements; it lists the revenue and expense accounts of the company.
A format for the operating section of the cash-flow statement that
Income that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies.
One of several investment accounts in which your premiums may be invested within your life insurance policy.
Financial intermediaries who perform a variety of services, including aiding in the sale of
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