A formal statement prepared by an independent certified public accountant (CPA) that spells out his judgment about the veracity and completeness of a set of financial statements prepared by company. When he believes those statements to be materially complete and accurate, his judgment will be “unqualified.” A “qualified” judgment indicates that the statements may not be reliable sources of information, and that potential investors should beware.
See also: Annual report, CPA, Financial statements
Pete needed anaccountant’s opinionbefore the bank would even consider his request for a business loan.
Short-term liabilities incurred by a business when it buys on credit from suppliers. Often associated with inventory purchases.
See also: Balance sheet, Liabilities
The flight school’s bookkeeper kept track of theaccounts payableto ensure the
school stayed in good standing with their vendors.
An asset held by a business that measures the money still owed to them for their credit sales, but AR does not include credit card sales, unless the card is issued by that business, for instance, a department store card.
See also: Asset
Theaccounts receivableoffice kept track of who owed the company money.
An accounting term used to describe revenue or expenses recognized although no cash has yet changed hands (for example, interest earned but not yet received).
See also: Accounts payable, Accounts receivable
The bookkeeper accounted for all theaccrualsat the end of the period so the
company’s books would be accurate when the tax accountant arrived.