Reserve account


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Reserve account

A separate amount of cash or letter of credit to service a payment requirement such as debt service or maintenance.

Allowance for Doubtful Accounts

Extra funds from sales, or another source, set aside in order to pay off bad debt if and when it arises. The allowance helps a company ward off any potential cash flow problems should its credit sales not be repaid as expected. On financial statements, it is important to note that an allowance for bad debts exists for fiscal conservatism and not because one expects a large amount of bad debt to accumulate. An allowance for doubtful accounts is also called a cushion. Banks call these funds the loan loss reserve. See also: Savings account.
References in periodicals archive ?
ABC should establish in its books and records--via a credit to a new reserve account, for example, that $800,000 of the total $7 million bad-debt reserve represents a sustained loss equal to 80% of the $1 million receivable from XYZ.
When you rehire former employees who are receiving UI benefits, the charge against your reserve account will disappear.
Prompted by these concerns, the Federal Reserve Board and private-sector groups began studies of the causes and potential means of controlling payment system risk, including the risk arising from daylight overdrafts in Federal Reserve accounts.
Even as the reserve account steps down, the notes and the certificates will have 12.
Buffering potential negative reserve account charges -- A company that hires temporary workers forms a new entity and obtains a separate account number.
Bond proceeds will be used to make deposits of $2,000,000 to the reserve account, $1,800,000 to the capitalized interest account, and approximately $195 million to the loan account to acquire student loans through December 1, 2008.
The contribution to the reserve account will be made from partnership cash flow after holders of preference units receive their minimum quarterly distributions.
The Ultimate Reserve Account was developed in direct response to our current and prospective customers," said Doug Kronenberg, chief marketing officer for the Homearnings(SM) Reverse Mortgage.
Pyxis 2006-1 includes a reserve account which is funded over time from cash proceeds, and a super senior liquidity facility expected to consist of a $900 million unfunded super swap and the $180 million unfunded class A-1 notes.
O/C is currently 22% of the collateral balance while the reserve account has increased to 2.
Upon the expiration of the CDS contracts during this period, CDS notional reductions will be used to reduce the unfunded portion of the senior swap so long as the reserve account balance is zero.
The notes issued by Chase Issuance Trust (formerly known as Bank One Issuance Trust) are secured by the series 2002-CC collateral certificate issued by First USA Credit Card Master Trust, the series 2004-CC collateral certificate issued by Chase Credit Card Master Trust, and the collection account, the excess funding account, and any other supplemental accounts in asset pool one, including the interest funding account, the principal funding account, and the class C reserve account for the CHASEseries.