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accounts receivable turnover rate

a ratio used to measure the liquidity of accounts receivable and the reasonableness of the accounts receivable balance

aging the accounts recievable

the process of classifying account receivable by age groups such as current, 1-30 days past due, 31-60 days past due, etc

allowance for doubtful accounts

a valuation account or contra-asset account relating to accounts receivable and showing the portion of the receivables estimated to be uncollectable

bank reconciliation

an analysis that explains the difference between the balance of cash shown in the bank statement and the balance of cash shown in the depositor's records

cash equivalents

very short-term investments that are so liquid that they are considered equivalent to cash

cash management

planning. controlling, and accounting for cash transactions and cash balances

compensation balance

a minimum average balance that a bank may require a borrow to leave on deposit in a non interest-bearing account


failure to pay interest or principle of promissory note at the due date

direct write-off method

a method of accounting for uncollectible receivables in which no expense is recognized until individual accounts are determined to be worthless


transactions in which a business either sells its accounts receivable to a financial institution or borrows money by pledging its accounts receivable as collateral

fair value accounting

the balance sheet valuation standard applied to investments in marketable securities

financial assets

cash and assets convertible directly into known amounts of cash (such as marketable securities and receivables)


an increase in owners' equity resulting from a transaction other than earning revenue or investment by the owners

line of credit

a prearranged borrowing agreement in which a bank stands ready to advance the borrower without delay any amount up to a specified credit limit


a decrease in owners' equity resulting from any transactions other than an expense or a distribution to the owners

marketable securities

highly liquid investments, primarily in stocks and bods, that con be sold at quoted market prices in organized securities exchange

net realizable value

the balance sheet valuation standard applied to receivables

NSF check

a customer's check that was deposited but returned because of a lack of funds in the account on which the check was drawn

Unrealized holding gain (or loss) on investments

a stockholders' equity account representing the difference between the cost of investments owned and their market value at the balance sheet date

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