ACCEPTANCE: Under a Letter of Credit, an acceptance drawn on and accepted by a bank that thereby becomes primarily liable to pay on the maturity date.
ACCOUNTS PAYABLE: A current liability representing the amount owed by an individual or a business to a creditor for merchandise or services purchased on open account or short-term credit.
ACCOUNTS RECEIVABLE: Money owed a business for merchandise or services bought on open account. Accounts receivable arise from the business practice of providing customer merchandise or a service with the expectation of receiving payment per specified terms. The terms are included on the seller’s invoice to the buyer with no written evidence of debt executed between seller and buyer.
ADVANCE: A drawdown or disbursement of funds according to the terms of an existing loan agreement. Advances are common to revolving credit facilities. The term can also refer to a customer paying its accounts payable prior to the agreed-upon date.
ADVANCE RATE: The maximum percentage that the lender will lend against a type of collateral. The advance rate will vary by the type of collateral, terms, age, and perhaps the financial strength of the obligated party.
ADVISING BANK UNDER LETTERS OF CREDIT: The bank which receives a Letter of Credit or amendment to a Letter of Credit from the issuing bank [buyer’s bank] and forwards it to the beneficiary [seller/exporter] of the credit.
AFFILIATES: Business entities that have common ownership, common management, or contractual relationships that give one control over the other.
AGENT BANK: bank acting for a foreign bank.
AGING [SCHEDULE]: A periodic report listing a borrower’s accounts receivable or payable balances, by customer or supplier, detailing the current status or delinquency of the balances owed or owing. The report is usually used in determining the borrower’s compliance with the borrowing base requirements in the loan agreement.
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