financial management chp 7 Flashcards
Accounts Receivable
Money owed to the organization or individual in exchange for goods and services it has provided
Accounts payable
Amounts owed to suppliers
Accrual accounting
See accrual basis
Aging schedule
Management report that shows how long receivables have been outstanding since an invoice was issued
Carrying costs
Capital costs and out of pocket costs related to holding inventory. Capital costs represent the lost interest because money is tied up in inventory. Out of pocket cost of food such expenses as insurance on the value of of inventory, annual inspections, and obsolescence of inventory
Certificate of deposit
Bank deposit with a fixed maturity term
Commercial paper
Form of short-term borrowing in which the borrower issues and unsecured promissory note that can be sold by the lender to someone else
Concentration bank
Bank where an organization maintains a significant presence
Current assets
Resources the organization has that either are cash or can be converted to cash in one year or will be used up within one year. Current assets are often referred to as short term or near term assets
Current liabilities
Those applications that are expected to be paid within one year
Derivatives
Securitys whose value is derived from the value of something else
Economic order quantity
Inventory optimization approach to determine the balance between ordering costs and Carrying costs, and to minimize overall costs related to ordering and carrying inventory
Equity
Ownership; for example, the share of a house that is owned by the homeowner free and clear of any mortgage obligations is the homeowners equity in the house
Float
The interim period from when a check is written until the check is cashed and clears the bank; movement of staff from one unit or department to another
