On Account


DEFINITION of 'On Account'

An accounting term that denotes partial payment of an amount owed or the purchase/sale of merchandise or a service on credit. For example, if a firm purchases $5,000 worth of merchandise on account, this refers to the purchase of the goods on credit and a deferral of payment.


Most lenders will accept payments on account. All installment payments of any kind, including mortgage payments, could be considered payments on account. Any purchases with credit can be referred to as purchases on account.

  1. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  2. Finance

    The science that describes the management, creation and study ...
  3. Payment

    The transfer of one form of good, service or financial asset ...
  4. Account

    1. An arrangement by which an organization accepts a customer's ...
  5. General Ledger

    A company's main accounting records. A general ledger is a complete ...
  6. Credit

    1. A contractual agreement in which a borrower receives something ...
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  1. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  2. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  3. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  4. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>
  5. How can working capital affect a company's finances?

    Working capital, or total current assets minus total current liabilities, can affect a company's longer-term investment effectiveness ... Read Full Answer >>
  6. What can working capital be used for?

    Working capital is used to cover all of a company's short-term expenses, including inventory, payments on short-term debt ... Read Full Answer >>

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