In commerce, the term "account" has multiple meanings and applications. Here are the main definitions and uses of the term:
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Financial Record: An account is a detailed record of all the money that a business or a person receives and spends. In accounting, an account is a record in the general ledger that tracks the financial activities of a specific asset, liability, equity, revenue, or expense. These records increase and decrease as business events occur throughout the accounting period. Each individual account is stored in the general ledger and used to prepare the financial statements at the end of an accounting period.
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Banking Relationship: In banking, an account refers to an ongoing financial relationship between customers and their bank. Bank accounts are arrangements that customers have with their bank, allowing them to deposit, withdraw funds, and, in some cases, earn interest.
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Commercial Relationship: In commerce, accounts are continuing relationships between suppliers (sellers) and buyers. Buyers pay for goods or services that they have received at a later date, based on agreed-upon payment terms. Large companies and government departments may ask for extended payment terms, such as 60 or 90 days.
