Accounting Tools

FEBRUARY 15, 2024

For example, it could receive cash from a lender when it enters into a lending arrangement. Related AccountingTools Courses Accountants’ Guidebook Bookkeeping Guidebook Revenue Recognition Related Articles Revenue Accounts The Difference Between Gross Sales and Net Sales The Difference Between Unearned Revenue and Unreported Revenue

Accruals 75

Accruals Accounts Receivable Accounts Receivable Account Receivables 75

Accounting Tools

OCTOBER 4, 2023

Terms Similar to Prime Rate The prime rate is also known as the prime lending rate, prime interest rate, or base lending rate. Related Articles Calculating the Weighted Average Interest Rate Effective Interest Rate How to Calculate the Implied Interest Rate Imputed Interest Rate Nominal Interest Rate Stated Interest Rate

Corporate Finance 40

Corporate Finance 40

Accounting Tools

MAY 21, 2023

There are several meanings for the term debit balance that relate to accounting, bank accounts, lending, and investing. Debit Balance in Lending A debit balance is the remaining principal amount of debt owed to a lender by the borrower. They are noted below.

Reconciling 40

Reconciling Bookkeeping Accounts Receivable Accounts Receivable 40

Accounting Tools

OCTOBER 28, 2023

A negative balance in a bank account is an overdraft situation, where the bank is lending money to the account holder on a short-term basis. Related Articles Account Analysis Account Reconciliation Account Statement Account Title This report only lists the ending account balances in all accounts for which there is a non-zero balance.

General Ledger 75

General Ledger Accounting Accounting Account Reconciliation 75

Accounting Tools

OCTOBER 27, 2023

The nominal interest rate is the interest percentage stated in a contractual lending arrangement. Related Articles Effective Interest Rate Imputed Interest Rate Market Interest Rate Real Interest Rate Stated Interest Rate

Corporate Finance 40

Corporate Finance 40

Accounting Tools

OCTOBER 27, 2023

Creditors , lenders , and investors want to see financial statements with an unqualified opinion attached to them before they will lend money or invest funds. Related Articles Except-For Opinion Piecemeal Opinion Qualified Opinion Terms Similar to Unqualified Opinion An unqualified opinion is also known as a clean opinion.

Financial Statements 40

Financial Statements Auditing Accounting Accounting 40

Accounting Tools

SEPTEMBER 10, 2023

A fixed rate loan is a lending arrangement in which the interest rate charged does not change for the life of the loan. Related Articles Bridge Loan Demand Loan Evergreen Loan Secured Loan Self-Liquidating Loan Term Loan Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Fixed Rate Loan?

Corporate Finance 40

Corporate Finance 40

Accounting Tools

JUNE 11, 2023

This information is then used to reach decisions about how to manage the business, or invest in it, or lend money to it. Related Articles Accounting Department Responsibilities Basic Accounting Concepts Debit and Credit Rules Full Cycle Accounting The Basis of Accounting Types of Transaction Cycles in Accounting

Financial Statements 75

Financial Statements Accounting Accounting Financial Reporting 75

Accounting Tools

MAY 21, 2023

This arrangement varies from the normal lending approach, where there is a predetermined maturity date and a schedule of payments to be made. Related Articles Bridge Loan Credit Facility Evergreen Loan Fixed Rate Loan Self-Liquidating Loan Term Loan An example of a demand loan is an overdraft arrangement.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

OCTOBER 7, 2023

An equity kicker is a lending arrangement in which the lender agrees to provide a reduced interest rate in exchange for an ownership position in the borrower. Related Articles Commitment Fee Firm Commitment Floatation Cost Issuance Costs Offering Costs Underwriting Fees

Corporate Finance 40

Corporate Finance 40

Accounting Tools

OCTOBER 1, 2023

The term can also refer to a guarantee by a lending institution to issue a loan to a borrower within a fixed period of time, if the loan is requested by the borrower. Related Articles Book Building The Initial Public Offering Registration Statement The lender enters into this arrangement in exchange for an annual fee.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

SEPTEMBER 3, 2023

Non-recourse financing is a lending arrangement in which the lender cannot access the borrower 's assets in order to obtain payment, other than any designated collateral. Related Articles Field Warehouse Financing Floor Planning Line of Credit Short Term Sources of Funds Working Capital Loan

Corporate Finance 40

Corporate Finance 40

Accounting Tools

OCTOBER 12, 2023

A secured loan is a lending agreement in which the borrower pledges an asset as collateral , which the lender can seize if the borrower cannot pay back the underlying loan. Related Articles Demand Loan Evergreen Loan Self-Liquidating Loan Term Loan Working Capital Loan

Corporate Finance 40

Corporate Finance 40

Accounting Tools

JUNE 19, 2023

The amortization concept is also used in lending, where an amortization schedule itemizes the beginning balance of a loan , less the interest and principal due for payment in each period, and the ending loan balance. Examples of intangible assets are patents, copyrights, taxi licenses, and trademarks.

Auditing 75

Auditing Accounting Accounting 75

Accounting Tools

SEPTEMBER 24, 2023

The purpose of this balance is to reduce the lending cost for the lender, since the lender can invest the cash located in the compensating bank account and keep some or all of the proceeds. Related Articles Cash Overdraft Intercompany Netting Treasury Functions

Corporate Finance 40

Corporate Finance Financial Statements Accounting Accounting 40

Accounting Tools

FEBRUARY 23, 2024

It is reported on the income statement as a non-operating expense , and is derived from such lending arrangements as lines of credit, loans, and bonds. Related Article How to Calculate Interest Expense What is Interest Expense? Interest expense is the cost of borrowed funds. What is Interest Payable? Therefore, the $416.67

Bookkeeping 40

Bookkeeping Accounting Accounting 40

Accounting Tools

SEPTEMBER 22, 2023

When a Promise to Pay Agreement is Used This type of agreement is used when a customer has not paid an amount that was made available on trade credit , and the creditor now insists on a formal lending arrangement to improve the odds of repayment. Promise to pay agreements may be required for payday loans, car loans, and mortgages.

Collections 40

Collections Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

JANUARY 24, 2024

The lender agrees to lend funds to the borrower upon a promise by the borrower to pay interest on the debt, usually with the interest to be paid at regular intervals. What is Debt? Debt is an amount owed for funds borrowed. A person or business acquires debt in order to use the funds for operating needs or capital purchases.

Corporate Finance 40

Corporate Finance Tax Accounting Accounting 40

Accounting Tools

JULY 27, 2023

Security interests are common with any asset-based lending, such as mortgages and car loans. Related Articles Debt Financing The lender can use this security interest to claim the asset if the borrower defaults on a loan agreement, thereby paying off the loan. The lender takes out a lien on the property.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

JANUARY 30, 2024

This measurement is used by creditors , lenders , and investors to determine the risk of lending funds to a company. Related Articles Cash Flow to Debt Ratio Coverage Ratio Debt Service Coverage Ratio Fixed Charge Coverage Ratio Interest Coverage Ratio

Financial Statements 40

Financial Statements Tax 40

Accounting Tools

SEPTEMBER 22, 2023

A variable rate loan is a lending arrangement under which the interest rate varies in accordance with changes in a standard rate. Related Articles Demand Loan Evergreen Loan Fixed Rate Loan Self-Liquidating Loan Term Loan Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Variable Rate Loan?

Corporate Finance 40

Corporate Finance 40

Accounting Tools

MARCH 8, 2024

These reports are also used by outsiders to evaluate lending and investment opportunities with the firm. Related Articles Accounting System Design Budgeting and Planning Software Financial Information Systems Treasury Workstations Types of Accounting Software The internal controls used to ensure that information is recorded correctly.

General Ledger 40

General Ledger Accounting Accounting Accounts Payable 40

Accounting Tools

JUNE 8, 2023

The concept is also useful for comparing several alternative lending or borrowing arrangements that incorporate different interest rate calculations. Related Articles Financial Structure Simple Interest The Difference Between Simple Interest and Compound Interest The Time Value of Money Concept

Financial Analysis 75

Financial Analysis 75

Accounting Tools

AUGUST 1, 2023

The lender agrees to lend funds to the borrower upon a promise by the borrower to pay interest on the debt, usually with the interest to be paid at regular intervals. Related Courses Accountants' Guidebook GAAP Guidebook How to Audit Liabilities What is Debt? Debt is defined as an amount owed for funds borrowed. Final payment.

Accounting 40

Accounting Accounting Bank Reconciliation Accounts Payable 40

AvidXchange

JANUARY 17, 2024

Risk Assessment Banks and credit unions can use AI models to make lending risk evaluations more accurate. Market Analysis Natural language processing (NLP) is a form of AI that can gauge market sentiment by analyzing news articles, social media and other text.

Financial Services 52

Financial Services Accounts Payable Accounts Payable AP 52

Accounting Tools

SEPTEMBER 8, 2023

Managerial accounting reports are more likely to be of use in improving operations, while financial accounting reports are used by outsiders to decide whether to invest in or lend to a business.

Financial Statements 76

Financial Statements Accounting Accounting Accruals 76

Accounting Tools

AUGUST 7, 2023

To get out of the situation, managers may be forced to sell assets on a rush basis, lend their own money to the firm, and/or eliminate discretionary expenditures. Related Articles Foreclosure Voluntary Bankruptcy Workout Arrangement

Tax 40

Tax 40

Accounting Tools

NOVEMBER 6, 2023

A private equity firm lends it the money, but only at a 15% interest rate, because of the risks involved. Related Articles Accounts Receivable Financing Bridge Loan Factoring Advantages and Disadvantages How to Get Venture Capital Funding Seed Money

Corporate Finance 40

Corporate Finance Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

FEBRUARY 23, 2024

This valuation can also be useful when deriving the value of collateral to be used in a lending situation. Related Articles Examples of Intangible Assets Intangible Assets Accounting Intangible Assets Amortization Examples of intellectual property are unique manufacturing processes, patents, copyrights, and brands.

Financial Analysis 40

Financial Analysis Accounting Accounting 40

Accounting Tools

OCTOBER 12, 2023

This is because a lender will not be convinced to lend to a borrower with a high credit risk unless it is compensated with a greater return (in the form of interest). Of course, if a borrower’s credit risk is simply too high, then lenders will not offer to lend to it at all, rather than charging a higher interest rate.

Collections 75

Collections Accounts Receivable Accounts Receivable Account Receivables 75

Accounting Tools

OCTOBER 27, 2023

A loan is an arrangement under which the owner of property allows another party the use of it (usually cash ) in exchange for an interest payment and the return of the property at the end of the lending arrangement. Related Articles How to Record a Loan Payment that Includes Interest and Principal Mortgage Loan Payable

Accounts Payable 40

Accounts Payable Accounts Payable Accounting Accounting 40

Accounting Tools

APRIL 7, 2024

Lenders are unlikely to lend additional funds to a business that exhibits a negative debt service coverage ratio, and may require borrowers to maintain a debt service coverage ratio of greater than 1 over the life of their loans.

Financial Statements 40

Financial Statements Tax 40

Accounting Tools

JULY 14, 2023

Lenders and creditors rely on the current ratio to evaluate the liquidity of a borrower , and so might incorrectly lend money based on an excessively high current ratio. This can be a concern when calculating the current ratio , which compares current assets to current liabilities.

Accounts Receivable 75

Accounts Receivable Accounts Receivable Account Receivables Financial Statements 75

Accounting Tools

OCTOBER 24, 2023

It is reported on the income statement as a non-operating expense , and is derived from such lending arrangements as lines of credit , loans , and bonds. Related Articles Interest Earned Interest Income Related Courses Bookkeeper Education Bundle Bookkeeping Guidebook What is Interest Expense?

Invoicing 40

Invoicing Bookkeeping Accounts Payable Accounts Payable 40

Accounting Tools

MAY 19, 2023

A lender is typically only interested in lending to a business that has received an unqualified opinion from its auditors regarding its financial statements. Related Articles Going Concern Disclosures Risk of Material Misstatement Statement of Affairs Tolerable Misstatement Workout Arrangement

Financial Statements 75

Financial Statements Record Keeping Auditing Accounting 75

Accounting Tools

NOVEMBER 8, 2023

In particular, a lender wants this ratio to exceed a minimum threshold level before it will agree to lend money to a borrower. Related Articles Cash Flow to Debt Ratio Debt Service Coverage Ratio EBITDA Coverage Ratio Fixed Charge Coverage Ratio Times Interest Earned Ratio

General Ledger 40

General Ledger Financial Statements Collections Accounts Receivable 40

Accounting Tools

JULY 13, 2023

Creditors as Stakeholders Creditors lend money to the company, and may or may not have a secured interest in the company's assets, under which they can be paid back from the sale of those assets. Related Articles The Difference Between a Shareholder and a Stakeholder

Tax 40

Tax Bookkeeping 40