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Finance Basics (HBR 20-Minute Manager Series) by Harvard Business Review

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Key Terms

Accounts payable (A/P).   Money owed by a company to suppliers.

Accounts receivable (A/R).   Money owed to a company for goods or services sold.

Accrual.   An amount incurred as an expense in a given accounting period but not paid by the end of that period.

Accrual accounting.   An accounting method whereby revenue and expenses are booked when they are incurred, regardless of when they are actually received or paid. Revenue is recognized in the time period when the goods or services are delivered; expenses are recognized in the same period as their associated revenues.

Acid-test ratio.   See quick ratio.

Allocation.   The process of dividing costs in a certain category among several cost centers, typically on the basis of usage. For ...

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