End of Month (EOM) refers to a specific point in time that typically marks the conclusion of a financial or accounting period. At the EOM, businesses finalize their accounts by reconciling all transactions, completing tasks like issuing invoices, and addressing outstanding receivables and closing inventory.
The loss ratio measures the ratio of losses incurred (or loans losses for banks) to either total premiums earned by an insurer or the overall receivables or debts for a corporation within a specific period, often one year.
Receivables represent the amount of money owed to a business by its customers for goods or services delivered or used but not yet paid for. These are current assets recorded on the balance sheet, reflecting the business's right to receive payment.
The specific charge-off method allows for the deduction of bad debt at the time a specific receivable is determined to be uncollectible, following the exhaustion of all possible collection methods. Accrual basis taxpayers are required to use this method for tax purposes, as they can no longer accrue reserves for bad debts.
