What is a suspense account?

A suspense account is an account in the general ledger in which amounts are temporarily recorded. The suspense account is used because the proper account could not be determined at the time that the transaction was recorded.

When the proper account is determined, the amount will be moved from the suspense account to the proper account.

credit default swap

A specific kind of counterparty agreement which allows the transfer of third party credit risk from oneparty to the other. One party in the swap is a lender and faces credit risk from a third party, and the counterparty in the credit default swap agrees to insure this risk in exchange of regular periodicpayments (essentially an insurance premium). If the third party defaults, the party providing insurance will have to purchase from the insured party the defaulted asset. In turn, the insurer pays the insured the remaining interest on the debt, as well as the principal.

Purchase Order

Purchase order (PO) is a commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services the seller will provide to the buyer. Sending a purchase order to a supplier constitutes a legal offer to buy products or services. Acceptance of a purchase order by a seller usually forms a one-off contract between the buyer and seller, so no contract exists until the purchase order is accepted.

Debit memo

When a company fails to pay or short-pays an invoice, it is common practice to issue a debit memo for the balance and any late fees owed. In function debit memos are identical to invoices. 

Credit Memo

If the buyer returns the product, the seller usually issues a credit memo for the same or lower amount than the invoice, and then refunds the money to the buyer, or the buyer can apply that credit memo to another invoice.

Invoice

An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the buyer must pay the seller, according to the payment terms. The buyer has a maximum amount of days to pay these goods and are sometimes offered a discount if paid before. From the point of view of a seller, an invoice is a sales invoice. From the point of view of a buyer, an invoice is a purchase invoice

An invoice is essentially a detailed bill left by vendors and outside suppliers for goods or services rendered to a company. A typical invoice might list the quantity of each item, prices, billable hours, service description and a contact address for payment. While some expenses may be paid out of a general fund or petty cash account an invoice is usually paid through an accounts payable department by the posted due date.

An invoice is a legal document which can be used as evidence of an incurred debt. The recipient of the goods or services can challenge the legitimacy of individual charges, but the invoice itself is considered a bona fide debt. Sometimes a vendor or serviceman cannot collect on a bill immediately, so their company will send an invoice at a later date for payment. The actual daily expense of a service may be so low that a company will simply wait for a larger invoice to cover all of the costs at once. Vending machine attendants and bottled water providers may only send one invoice a month instead of billing the company a few dollars a day for supplies.