MGT 3210 chapter 13 key terms

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Timing purchases

a method of controlling the timing of cash outflows that is invisible to suppliers and vendors

overdraft

a negative balance in a depositor's bank account

Discounts for prompt payment

a reduction in sales price provided to credit customers for paying outstanding amounts in a timely manner

charge back

a reduction in the bank account of a merchant by a credit card company

cash disbursement budget

a schedule of the amounts and timings of payments of cash out of a business

cash receipt budget

a schedule of the amounts and timings of the receipt of cash into a business

Non-Sufficient Funds (NSF)

a situation that occurs when a check is returned to a depositor because the writer of the check did not have a bank available balance equal to or greater than the amount of the check

comprehensive budget

also called the master budget, a series of budgets that detail all projected receipts and spending for the budget period

Recievables

amounts that are owed to a business for merchandise that was sold on credit. Also called payables

money

an accepted medium of exchange

reconcile

an accounting process to identify the causes of all differences between book and bank balances

Clearinghouse

an entity that processes checks and electronic transfers for banks and other financial organizations

short-term debt

any debt that must be paid in less than one year from the date of the financial statement on which it is reported

bearer

any person or business entity who has possession of a security

cash equivalents

assets that may be quickly converted to cash

currency

bills and coins printed by governments to represent money

factoring receivables

borrowing money secured by a firm's accounts receivable

deposits and progress payments

cash payments received before product is delivered or completed

growth trap

financial crisis that is caused by a business growing faster than it can be financed

cash budget

identifies when, how and why cash is expected to come into the business, and when, how and why it is expected to leave

demand deposit

money held in checking and savings accounts

cash

money that is immediately available to be spent

commercial paper

notes issued by credit worthy corporations

trade discounts

percentage discounts from gross invoice amounts provided to encourage prompt payment

Cash flow management

planning and trading the amount and timing of money to be received and aid during the business cycle

Non-core projects

revenue producing tasks and activities related to, but not part of, the primary strategy of a business

non-cash incentives

rewards that do not require payment of cash, such as stock options, compensating time off, added vacation days

marketable securities

stocks and bonds that are traded on an open market

consignment

the practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold

barter

the practice of trading goods and services without the use of money

company book balance

the sum of cash inflows and cash outflows recorded in the firm's accounting records

bank ledger balance

the sum of deposits and withdrawals recorded in a bank's accounting records

bank available balance

the sum of money that has actually been received and paid out of a depositor's account

Cash-to-cash cycle

the time that is required for a business to acquire resources, convert them into product, sell the product, and receive cash from the sale. Also called the operating cycle

gaming the payment process

using methods to appear to be paying bills on time, when in fact payment is being delayed or avoided


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