Account receivable:

Accounts receivable (A/R) is one of a series of accounting transactions dealing

with the billing of customers who owe money to a person, company or
organization for goods and services that have been provided to the customer
Claim against a debtor for an uncollected amount, generally from a completed
transaction of sales or services rendered.

Account payable:
An expense that has been incurred but not yet paid.
Amount owed to a creditor for delivered goods or completed services
Accounts payable is a file or account that contains money that a person or company
owes to suppliers, but has not paid yet (a form of debt). When you receive an invoice you
add it to the file, and then you remove it when you pay. Thus, the A/P is a form of credit
that suppliers offer to their purchasers by allowing them to pay for a product or service
after it has already been received

Annuity:
An annuity can be defined as a contract which provides an income stream in return for
an initial payment.

Series of payments at fixed intervals, guaranteed for a fixed number of years or the lifetime of
one or more individuals. Similar to a pension, the money is paid out of
an investment contractunder which the annuitant(s) deposit certain sums (in a lump sumor
in installments) with an annuity guarantor (usually agovernment agency or an insurance firm).
The amount paid back includes principal and interest, either or both of which (depending on
the local regulations) may be tax exempt. An annuity is not aninsurance policy but a tax-
shelter.
Amortization:
Gradual repayment of a loan in equal (or nearly equal)installments which include portions
of interest and principal amounts.
Bond:
Written and signed promise to pay a certain sum ofmoney on a certain date, or
on fulfillment of a specified condition. All documented contracts and loan agreements are
bonds.

Debt instrument which certifies a contract between the borrower (bond issuer) and
the lender (bondholder) as spelled out in the bond indenture. The issuer (company,
government,municipality) pledges to pay the loan principal (par value of the bond) to the
bondholder on a fixed date (maturity date) as well as a fixed rate of interest (paid usually
twice a year) for the life of the bond. Alternatively, some bonds are sold at a price lower than
their par value in lieu of the periodic interest; on maturity the fullpar value is paid to the
bondholder. Bonds are issued in multiplesof $1,000, usually for periods of five to twenty years
but somegovernment bonds are issued for only 90 days. Most bonds arenegotiable, and are
freely traded over stock exchanges. Theirmarket price depends mainly on the rating awarded
by bond rating agencies on the basis
of issuer's reputation and financial strength.Investment in bonds offers two advantages: (1)
known amount ofinterest income and, unlike other securities, (2) considerablepressure on the
company to pay because the penalties for defaultare drastic. The major disadvantage is that
the amount of incomeis fixed and may be eroded by inflation. Companies use bonds
tofinance acquisitions or capital investments. Governments use bonds to keep their election
promises, fund long-term capital projects, or to raise money for special situations, such as
natural calamities or war.
1. Bond indenture
Blanket, unconditional contract between the bond issuer and the bond purchaser (bondholder)
that specifies the terms of the bond. It states the interest rate (called coupon rate),
the dates when theinterest will be paid, maturity date(s), and other terms and conditions of
the bond issue. Failure to meet the paymentrequirements calls for
drastic penalties including liquidation of theissuer's assets. Also called bond resolution.