Define Accounting

question 78

Essay

Define accounting.Describe the two primary functions of financial accounting and its role in our society.

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Definitions:

Average Collection Period

The average number of days it takes for a company to receive payments owed by its customers for goods or services sold on credit.

Credit Sales

Credit sales are transactions where the buyer is allowed to pay for goods or services at a later date, extending credit.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered on credit.

Compensating Balance

A minimum balance that must be maintained in a bank account, often required by banks in return for loans or as part of a service agreement.