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Money owed to suppliers.
Accounts receivable
Money owed by customers.
Accounts receivable turnover
The ratio of net credit sales to average accounts receivable, a measure of how quickly customers pay their
bills.
Accretion (of a discount)
In portfolio accounting, a straight-line accumulation of capital gains on a discount bond in anticipation of
receipt of par at maturity.
Accrual bond
A bond on which interest accrues, but is not paid to the investor during the time of accrual. The amount of
accrued interest is added to the remaining principal of the bond and is paid at maturity.
Accrued interest
Mainly applies to convertible securities. Interest that has accumulated between the most recent payment
and the sale of a bond or other fixed-income security. At the time of sale, the buyer pays the seller the bonds
price plus accrued interest, calculated by multiplying the coupon rate by the fraction of the coupon period
that has elapsed since the last payment. (If a bondholder receives $40 in coupon payments per bond semi-
annually and sells the bond one quarter of the way into the coupon period, the buyer pays the seller $10 as
the latter proportion of interest earned.)
Accumulated Benefit Obligation (ABO)
An approximate measure of the liability of a pension plan in the event of a termination at the date the
calculation is performed. Related: projected benefit obligation.
ACH
See: Automated Clearing House
Acid-test ratio
Also called the quick ratio, the ratio of current assets minus inventories, accruals, and prepaid items to
current liabilities.
Acquiree
A firm that is being acquired.
Acquirer
A firm or individual that is acquiring something.
Acquisition
When a firm buys another firm.
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