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. Down Payment

    A type of payment made in cash during the onset of the purchase ...
  3. Trust Receipt

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

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

    1. The amount of money in a financial repository, such as a checking ...
  6. Account Activity

    A banking term that refers to any activity that creates a debit ...
Related Articles
  1. Personal Finance

    When is a Down Payment Used?

    A down payment is an initial cash payment on an expensive good.
  2. Investing

    New Rules That Could Trash (or Help) Your Credit

    Cable bills and similar financial obligations will soon be factored into your credit score. Good news if you're an on-time payer. If not, become one!
  3. Personal Finance

    6 Ways To Build Credit Without A Credit Card

    It's definitely possible – if a bit more complicated – to build a credit history without traditional credit cards. Just follow these steps.
  4. Personal Finance

    What is an Account Balance?

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

    What's a Hire Purchase?

    Hire purchase is a term used in Great Britain to describe an installment plan payment arrangement.
  6. 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.
  7. Investing

    Understanding the Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  8. 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.
  9. 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.
  10. 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.
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 transactions are included in a country's balance of payments?

    Learn about the many types of transactions that are recorded in a country's balance of payments, including the current, capital ... Read Answer >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. What's the difference between the current account and the balance of payments?

    Learn about the differences between balance of payment and current account; discover different uses of each term and how ... Read Answer >>
Hot Definitions
  1. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  2. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  3. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  4. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  5. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  6. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
Trading Center