On Account

What does 'On Account' mean

On account is 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.

BREAKING DOWN 'On Account'

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.

RELATED TERMS
  1. Trade Line

    Credit account records that are provided to credit reporting ...
  2. Trust Receipt

    Notice of the release merchandise to a buyer from a bank, with ...
  3. Automatic Bill Payment

    A money transfer scheduled on a predetermined date to pay a recurring ...
  4. Account Balance

    1. The amount of money in a financial repository, such as a checking ...
  5. Merchandising

    Merchandising is any act of promoting goods or services for retail ...
  6. Graduated Payment Mortgage

    A type of fixed-rate mortgage in which the payment increases ...
Related Articles
  1. Personal Finance

    What is an Account Balance?

    An account balance represents the total amount of money in a financial account at any given moment.
  2. Investing

    Millennials: Prevent a Bad Credit Score

    Here are five ways to help prevent getting a bad credit score that could affect future loan, credit card or mortgage approvals.
  3. Investing

    Understanding the Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  4. Investing

    What's On A Consumer Credit Report?

    A look at the various components and considerations that go into one's credit report and credit score.
  5. Personal Finance

    Revolving Credit vs. Line of Credit

    Revolving credit and a line of credit are arrangements made between a lending institution and a business or individual.
  6. Markets

    Is the Payment Processing Industry Evolving? (PYPL, TGT)

    Learn about the many changes in commerce and payment systems that are happening in the rapidly evolving payment processing industry.
  7. Personal Finance

    Mortgage Basics: Costs

    By Lisa SmithPeople generally think about a mortgage in terms of the monthly payment. While that payment represents the amount of money needed each month to cover the debt on the property, the ...
  8. Personal Finance

    The 5 Biggest Factors That Affect Your Credit

    Credit companies rely on these factors to determine whether to lend to you and at what rate.
  9. Investing

    Simple Steps for Rebuilding Your Credit

    Trying to repair your credit? Your first instincts may not be correct. Review your best options for raising a bad credit score and start repairing your financial history today.
  10. Personal Finance

    Is Making Biweekly Mortgage Payments A Good Idea?

    Some people believe making mortgage payments every two weeks, as opposed to once a month, can chop years off of a home loan. But is it really a good idea?
RELATED FAQS
  1. What are the differences between installment sales and credit sales?

    Determine the differences between credit sales and installment sales, which businesses often offer their customers for deferred ... Read Answer >>
  2. What are the differences between income statements from merchandising companies vs. ...

    Learn how merchandising companies and service companies have to account for different information when preparing an income ... Read Answer >>
  3. Is a deficit in the balance of payments a bad thing?

    Discover how it might be possible to run a balance of payments deficit, what that means in terms of international trade and ... Read Answer >>
  4. How long are accounts receivable allowed to be outstanding?

    Learn about accounts receivable, including how long they typically remain outstanding, and how their payment or lack of payment ... Read Answer >>
  5. Will getting a student loan deferral hurt my credit score?

    You may not be able to afford to pay your student loans, but the long-term consequence to your credit score be disastrous. Read Answer >>
  6. What are the differences between revolving credit and a line of credit?

    Understand how to differentiate between a line of credit and a revolving credit account, and find out why business owners ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center