An accounting package is a type of business software designed to help businesses manage their accounting processes including invoicing, payroll, accounts payable, accounts receivable, and general ledger functions.
Accounts Payable (AP) is a short-term debt account, representing a company's obligation to pay off a short-term debt to its creditors or suppliers.
Bills payable refers to the amounts a company owes to its creditors for the purchase of goods or services that were bought on credit.
The Bought Ledger, also known as Creditors’ Ledger, is a sub-ledger accounting record that details all the credit purchases a company makes from its suppliers, providing a clear view of all owed amounts and due dates.
In the manufacturing industry, the cash cycle represents the interval between the outlay of cash to procure raw materials and the receipt of payment for the manufactured goods produced from them.
A control account is a general ledger account that summarizes the total balances of subsidiary ledgers, ensuring accuracy and efficiency in financial reporting.
Current liabilities are debts or obligations that a company expects to pay off within one year as part of normal business operations. Examples include accounts payable, short-term loans, and the current portion of long-term loans.
EOM Dating refers to a specific arrangement in payment terms where all purchases made through a specific day of one month are payable within a set period after the end of the following month.
The General Ledger (GL) is a key component of an organization's accounting system, serving as a comprehensive record of all financial transactions made over the life of an organization.
A document used by businesses to confirm and record the receipt of goods ordered. The GRN ensures that the items received match the order in terms of quantity, quality, and specification.
A payable is an amount that is owed by a company to its suppliers or creditors, typically from the purchase of supplies or inventory (accounts payable), but it can also include amounts owed for other purposes such as bank loans (bank loans payable).
Payables refer to accounts, rates, and mortgages owed by a business or person, often encompassing current liabilities rather than all types of debt.
Personal accounts are used to record transactions with individuals or entities, such as debtors and creditors. These accounts are essential for managing relations and obligations with people and organizations.
A purchase discount is a financial incentive offered by sellers to buyers for early payment of an invoice. It is commonly known as a cash discount.
A Purchase Journal is a specialized accounting book where all purchases made on account are initially recorded. It typically includes details about the date of purchase, supplier name, purchase amount, and other relevant information to maintain accurate financial records.
The Purchases Account is used to record transactions involving the acquisition of goods either on credit or for cash. It plays a critical role in managing a company's inventory and financial records.
The purchases ledger, also known as the creditors' ledger, is a detailed accounting record that tracks all the credit purchases a company makes. It manages company liabilities by listing every individual supplier from whom the company buys goods or services on credit.
The purchases ledger control account is a summary account within the general ledger used to record the total amount owed to suppliers and other creditors for goods or services received on credit.
Supplier credit is a financing method in which a supplier allows a buyer to purchase goods or services on credit, paying for them at a later date, potentially improving the buyer’s cash flow and operational efficiency.
Trade credit refers to open-account arrangements with suppliers of goods and services, involving a firm's record of payment with the suppliers. It constitutes a company's accounts payable and is an essential external source of working capital despite potentially high costs.
Trade creditors refer to suppliers or vendors to whom a business owes money for goods or services delivered but not yet paid for. These obligations are part of trade payables on a company's balance sheet.
Trade payables represent the amounts a business owes to its suppliers for goods and services received but not yet paid for. They are recorded as current liabilities on the balance sheet.
The Trade Receivables Collection Period refers to the time given to customers to pay their accounts, which is typically 30 days. However, late payments can occur and may affect cash flow significantly.
