Accounts payable

Money to carry accounts receivable (i.e., credit extended to customers) less accounts payable (i.e., credit extended by suppliers)... 

Finance. Cost accounting, budget control, payroU, records, accounts payable, accounts receivable, capital equipment control, taxes, customs, iasurance, loss control, and management information are all part of the finance function. 

The working capital includes the cost of inventories, such as raw materials, materials-in-process, products, etc as well as suppHes, accounts receivable less accounts payable, prepaid expenses, other cash needs such as payroll, and some start-up expenses, eg, materials and wages. Typical inventories can be taken as one month s supply of raw materials, products, and materials-in-process. The materials-in-process can be valued at one month s sales. Other operating cash can be estimated as the actual cash need for one month. 

Similarly, the distinction between current and long-term liabihties is also not clear-cut. Current liabilities include accounts payable (money owed to creditors), taxes payable, dividends payable, etc., if due within a year. Long-term liabihties include deferred income taxes, bonds, notes, etc., that do not have to be paid within a year. The owners equity includes the par, or face, value of the capital received from stockholders and any retained earnings. The balance sheet shows only the nominal value and not the current or real value of this capital. 

A shortage of cash may prevent a company from taking advantage of large discounts available for bulk purchase of raw materials. The importance of the availability of adequate cash or near cash can be seen by considering an account payable within 28 days, with a 2 percent discount allowed if paid within 7 days. If cash is not available to pay the account within 7 days, this is then equivalent to paying 2 percent interest on the money for the remaining 21-day period, or an annual compound-interest rate of more than 41 percent. 

Transactions that change the character of the net working capital but do not affect its value occur in a company. For example, a cash payment of 10,000 for accounts payable reduces both the current asset of cash by 10,000 and the current liabihty of accounts payable by 10,000, leaving the net working capital unchanged. However, this transac tion affects Doth the current and the quick ratios. 

Accounts payable, also called trade credit, are the major source of short-term financing. Accounts payable normally amount to about 40 percent of the current liabihties of a manufacturing company. Such short-term financing is relatively expensive when available discounts are lost. 

Determine the status of open accounts payable and whether billing for all materials and services IS complete. ... 

Figure 25.3 An example of the GAIT s accounts payable report.

The working capital is made up of all items not included in the fixed capital. It consists of accounts payable, raw materials inventory, work in progress, and product and by-product inventories. 

Liabilities are the obhgations that the company owes to creditors and stockholders. Current liabilities are obhgations that come due within a year and include accounts payable (money owed to creditors for goods and services), notes payable (money owed to banks, corporations, or other lenders), accrued expenses (salaries and wages to employees, interest on borrowed funds, fees due to professionals, etc ), income taxes payable, current part of long-term d t, and other current liabilities due within the year. 

Accounts payable The value of purchased goods and services that are being used but have not been paid. 

The accounting definition of woridng capital is total current assets minus total current liabilities. This information can be found from the balance sheet. Current assets consist chiefly of cash, marketable securities, accounts receivable, and inventories current liabilities include accounts payable, short-term debts, and the part of the long-term debt currently due. The accounting definition is in terms of the entire company. 

Liabilities are current or long-term commitments to pay off loans, notes, or bonds in the future or current promises to pay others for goods or services ordered on account. This latter type of quantity is called an account payable because it is an amount that the company expects to pay as bills come due in the future. 

Loans List all loans and other accounts payable by lender. Give full information on terms, payments, collateral, and so forth. 

In a business or organization, the CFO is the individual who is responsible for the financial decisions and investments made by the company. In a hospital or health system, the CFO is likely to have several departments and functions reporting to him or her, including general accounting, accounts receivable and accounts payable, payroll, budgeting, and finance. 

Current liabilities Accounts payable Line of credit—Wells Fargo Payroll taxes payable Sales tax payable Federal income tax pay—current State income tax pay—current Total current liabilities Noncurrent liabilities Note payable Loan payable... 

Modem balance sheets often use the general term liabilities in place of equities. Current liabilities are grouped together and include all liabilities such as accounts payable, debts, and tax accruals due within 12 months of the balance-sheet date. The net working capital of a company can be obtained directly from the balance sheet as the difference between current assets and current liabilities. Other liabilities, such as long-term debts, deferred credits, and reserves are listed under separate headings. Proprietorship, stockholders equity, or capital stock and surplus complete the record on the equity (or liability) side of the balance sheet. 

Separate ledger accounts may be kept for various items, such as cash, equipment accounts receivable, inventory, accounts payable, and manufacturing expense. A typical ledger sheet is shown in Fig. 5-5. The ledger sheets serve as a secondary record of business transactions and are used as the intermediates... 

Accounts payable B Company 2,000 Machinery and equipment (at present value) 18,000... 

The working capital for an industrial plant consists of the total amount of money invested in (1) raw materials and supplies carried in stock, (2) finished products in stock and semifinished products in the process of being manufactured, (3) accounts receivable, (4) cash kept on hand for monthly payment of operating expenses, such as salaries, wages, and raw-material purchases, (5) accounts payable, and (6) taxes payable. 

Notes and accounts receivable 110,740 Accounts payable and accrued liabilities 106,433... 

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