Open account

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Open account

Arrangement whereby sales are made with no formal debt contract. The buyer signs a receipt, and the seller records the sale in the sales ledger.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Open Account

1. See: Credit sale.

2. Any account where money is held or is owed. That is, a bank account with a $1,000 credit and another account with a $1,000 overdraft are both open accounts because they have non-zero balances.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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* Germany: Still the lion of the euro economy, and 96% sell there on open account terms.
In response to the Tax Court's decision in Brooks, in 2007 the IRS issued proposed regulations modifying the definition of open account debt (REG-144859-04).
Third, documentary collections and consignment payments remain popular in certain countries, while the use of open accounts is generally reserved for companies in low-risk countries that have established trading relationships.
Because the loan is open account debt, the income is ordinary--not a good result.
One may want to do business with an open account to begin to establish a long-term relationship or because the cost of doing business without an open account are quite high relative to the risk.
Since the importer's bank will pay 99 percent of all discrepant letters of credit after 90 days, even though the customer doesn't legally have to pay them, the exporter could have shipped the goods open account in the first place and kept the financing cost for itself instead of paying letter-of-credit fees.
Pakistan FMCG Importers Association (PFIA) leadership urged the State Bank of Pakistan to immediately restore the open account facility keeping in view the hardships to be faced by the importers due to its abolition.
1.1367-2(a) states that open account debt is a shareholder advance that is not evidenced by a note.
This makes offering foreign buyers open account payment terms--a practice dictated by competitive pressures in many overseas markets--a daunting challenge.
As sellers move down the ladder from open account toward cash in advance, they reduce their degree of payment risk.
The LCCI President Malik Tahir Javed, Senior Vice President Khwaja Khawar Rashid and Vice President Zeshan Khalil said that State Bank of Pakistan introduced open account facility for the importers in 2017 to promote international trade, under which the condition for submission of the original shipping/transport documents to authorized dealer by the importers was terminated.
KARACHI -- The State Bank of Pakistan (SBP) will take stern legal action against importers and banks involved in remittance of foreign exchange against duplicate/fraudulent import documents, prepared for imports on open account.