a reserve against bad debt. See also RESERVE and RESERVE ACCOUNTS.
the ratio of net credit sales to average accounts receivable, which is a measure of how quickly customers pay their bills.
the recognition of revenue when earned or expenses when incurred regardless of when cash is received or disbursed.
wherein revenue and expenses are recorded in the period in which they are earned or incurred regardless of whether cash is received or disbursed in that period. This is the accounting basis that generally is required to be used in order to conform to generally accepted accounting principles (GAAP) in preparing financial statements for external users.
ACCRUAL BASIS OF ACCOUNTING.
assets from revenues earned but not yet received.
interest earned but not paid since the last due date.
functions as a "clearing" account to establish a liability for inventory physically received into the warehouse, but for which a vendor invoice had not yet arrived.
liabilities which are incurred, but for which payment is not yet made, during a given accounting period. Some examples in a manufacturing environment would be: wages, taxes, suppliers/vendors, etc.
a liability arising from employees' salary expense that has been incurred but not paid
the accumulated revenue as they have been recognized over a given period.
ACCRUED LIABILITY.
the cumulative charges against the intangible assets of a company over the expected useful life of the assets.
Automated Clearing House.
See quick ratio
an analysis method used to measure the liquidity of a business by dividing total liquid assets by current liabilities.
a written recognition of debt that is enforceable in law, e.g. memorandum check, bank draft, or loan contract
one company taking over controlling interest in another company. See also MERGER and POOLING OF INTERESTS.
The amount actually paid to purchase an asset. This includes all costs associated with the purchase, such as installation, freight, and sales tax.
Customers who have bought a firm's products at least once in a 12 month period. Active customers are more likely (than the non-active or occasional customers) to buy again.
