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Accounts Receivable
Amounts due the company on account from customer who have bought merchandise or received services.

Current Asset
Item having a life of one year or less. Examples of current assets are cash,inventory,and accounts receivable.

Merchandise or supplies on hand or in transit at a particular point in time.

Face Value
Nominal amount of a debt obligation or equity security as stated in the instrument.

Good Will
Theoretically,the present value of future excess earnings of a company over other companies in the industry.

Common Stock
Share in a public company or privately held firm. Common stockholders have voting and dividend rights.

Fixed Asset (Plant Asset)
Item that has physical substance and a life in excess of one year. It is bought for use in the operation of the business and not intended for resale to customers. Examples are land,building,and machinery.

Time Deposit
Saving account at a financial institution that earns interest but is not legally subject to withdrawal on demand or transfer by check.

Intangible Asset
Item lacking physical substance or representing a right granted by the government or by another company.

Certificate of Deposit (CD)
Special type of time deposit. A CD is an investment instrument available at financial institutions generally offering a fixed rate on return for a specified period such as three month,six month,or longer.

Compensating Balance
Deposit that a bank can use to offset an unpaid loan.

Bank Reconciliation
Term used when settling different contained in the bank statement and cash account in the books of the bank’s customer. Rarely do the ending balances agree. To reflect the reconciling items, a bank reconciliation is required.

Outstanding Check
One issued by the company but not yet cleared by the bank.

Deposit in Transit
Cash receipts that arrived at the bank too late to be credited to the depositor’s bank statement for the current month.

NSF Check
Check not covered by sufficient bank balance. In preparing its bank reconciliation, the depositing entity must deduct the NSF check from the cash book balance.

1. Situation where a borrower draws money against a previously established line of credit.
2. Negative balance in a checking account caused by payment of checks drawn against insufficient funds.

Short-term Investment
Funds placed in securities that are expected to be held for one year or less. Examples include marketable securities,commodities,money market instruments,and options.

Trade Discount
Reduction of the list or regular price in return for the purchase of large quantities.

Bad Debt
Account shown in the income statement representing estimated uncollectible credit sales for the current accounting period.

Allowance for Bad Debts (Allowance for Doubtful Accounts)
Accepted way to account for bad debts.

Direct Write-off Method
Way of charging bad debt expense when an account receivable is actually deemed uncollectible.

Beginning Inventory
Balance at the start of the accounting period.

Ending Inventory
Goods on hand at the end of the accounting period.

Free On Board (F.O.B.)
本船渡し。荷主はその運送に責任を負わないことを表す語。F.O.B.の後にShipping point(発送地)やDestination(目的地)という語が入る。
Term indicating delivery will be made on board or into a carrier by the shipper without charge. The abbreviation FOB is followed by a shipping point or destination.

Periodic System
One that does not require a day- to-day record of inventory changes. Costs of material used and cost of goods sold cannot be calculated until ending inventories,determined by physical count,are subtracted form the sum of opening inventories and purchases.

Perpetual System
One keeping continual track of additions or deletions in materials,working in process,and cost of goods sold on a day-to-day basis.

First In,First Out Method (FIFO)
Method of inventory valuation that assumes merchandise is sold in the order of its receipt. The first-price in is the first-price out.

Last In,First Out Method (LIFO)
Inventory method in which it is assumed that goods are sold in the reverse order of their acquisition. Thus cost of sales is based upon the most recent cost. Ending inventory is based upon the costs of earliest purchase made.

Replacement Cost
Current cost to replace the service potential of an existing asset.

Unrealized Gain and Loss
Changing in value of an asset that is still being held. It is distinguished from a realized gain, loss on the sale of asset.

Realized Gain and Loss
Difference between the amount received from the sale or disposal of an asset and its carrying value. Realized gains and losses are shown in the income statement.

Noninterest-bearing Notes
Note receivable or note payable that does not provide for interest. In this unrealistic case, imputed interest on the note required.

Interest-bearing Notes
Note receivable or note payable that provides for interest.

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