AR
This document is sent to a customer requesting payment for goods or services provided.
What is an invoice?
A price reduction offered to customers for paying an invoice ahead of its due date.
What is a cash discount?
Every journal entry must include these two things
What is a debit and a credit?
This financial statement shows a company's revenues, expenses, and profit over a period of time.
What is an income statement
This document provides details on which invoices a customer is paying.
What is a remittance advice?
This document authorizes a company to buy goods or services from a supplier.
What is a purchase order?
The process of comparing internal financial records to external or supporting documentation to verify that balances are complete and accurate.
What is reconciliation?
This financial metric represents the amount remaining after expenses are deducted from revenue.
What is profit?
A reduction taken by a customer due to shortages, pricing issues, or damaged goods.
What is a deduction?
A vendor issues this document to reduce the amount owed due to returns, pricing corrections or other adjustments.
What is a credit memo?
An accounting term that refers to an expense that is recognized on the books before it has been paid.
What is an accrued expense?
This financial statement provides a snapshot of a company's assets, liabilities, and equity.
What is a balance sheet?
The older an invoice becomes, the more likely it is to become this.
What is bad debt?
This document is typically created by an employee or department to request the purchase of goods or services before a purchase order is issued.
What is a purchase request/requisition?
This recurring accounting cycle includes closing the books, reconciling accounts, posting accruals, and preparing financial reports.
What is the month end process
This process estimates future revenues and expenses based on historical trends and business expectations.
What is forecasting?
This AR metric measures the average number of days it takes to collect payment after a sale.
What is Days Sales Outstanding (DSO)?
Measures the average number of days a company takes to pay its suppliers.
What is Days Payable Outstanding (DPO)?
This report is used to verify that total debits equal total credits before financial statements are prepared.
What is a trial balance?
DIO + DSO - DPO =
What is the Cash Conversion Cycle?