Accounting Terms
Money owned by a company or supplier?
What is accounts receivable
A document listing products/services supplied, amounts due, and payment terms
What is an invoice
Guidelines for assessing customer creditworthiness and payment terms
What is credit policy
Ensuring sufficient liquidity through timely AR collection
What is Cash Flow management
Average collection period for receivables.
What is days sales outstanding
Money owed by a customer to a company.
What is accounts receivable
Accounting record for AR transactions: debit Accounts Receivable, credit Revenue; and vice versa upon cash collection
What is a journal enrty
Maximum credit extended to a customer
What is credit limit
AR impacts balance sheet, income statement, and cash flow statements
What is financial reporting
Average days to collect payment
What is average payment days
Something of value. Anything owned is a ______
Recording of payments received against AR
What is cash reciets
Conditions under which payment must be made
What is Payment Terms
Business’s ability to meet short-term obligations
What is liquidy
Measures collection efficiency (Revenue ÷ Average Accounts Receivable)
What is AR turnover ratio
An obligation you have to pay someone else money is what?
What is a liabaility
Early payment incentives reducing gross receivable
What is Sales discounts
Process of sending reminders for overdue payments
What is dunning
Evaluating financial health of customers for ongoing risk management
What is credit assets
Categorizing AR by overdue periods (current, 30 days, 60 days, etc.)
Aging of accounts receivable
Funds lend to a business with an agreement that the business will repay the lender with interest.
what is credit
Removing uncollectible receivables from AR
What is a write off
Likelihood of non-payment by a customer
What is credit risk
AR as a component that affects operational funding
What is working capital
[(Beginning AR + Ending AR)/2] over a period
Average Accounts receivable