Legal Dictionary of Pakistan

Account

A detailed statement of the debits and credits between parties to a contract or to a fiduciary relationship; a reckoning of monetary dealings <the trustee balanced the account at the end of each month>. 0 In wills and estates, an account is a brief financial statement of the manner in which an executor or administrator has performed the official duties of collecting the estate's assets and paying those who are entitled. An account charges the executor or administrator with the value of the estate as shown by the inventory, plus any increase, and credits the executor with expenses and costs, duly authorized disbursements, and the executor's commission. - Abbr. acct.; a/c. 2. A course of business dealings or other relations for which records must be kept <open a brokerage account>. 3. ACCOUNTING (3) <the principal filed an action for account against his agent>. - Also spelled (archaically) accom pt. "The action of account lies where one has received goods or money for another in a fiduciary capacity, to ascertain and recover the balance due. It can only be maintained where there is such a relationship between the parties, as to raise an obligation to account, and where the amount due is uncertain and unliquidated." Benjamin J. Shipman, Handbook of Common-Law Pleading § 56, at 144 (Henry Winthrop Ballantine ed., 3d ed. 1923).4. ACCOUNTING (4) <the contractor filed an action for account against the nonpaying customer. 5. A statement by which someone seeks to explain an event <Fred's account of the holdup differed significantly from Martha's > . account in trust. An account established by an individual to hold the account's assets in trust for someone else.

Accountable

adj. Responsible; answerable <the company was held accountable for the employee's negligence>. - accountability, n. accountable receipt. See RECEIPT.

Accountant

A person authorized under applicable law to practice public accounting; a person whose business is to keep books or accounts, to perform financial audits, to design and control accounting systems, and to give tax advice. 0 For some purposes, the term includes a professional accounting association, a corporation, and a partnership, if they are so authorized.

Accounting

The act or a system of establishing or settling financial accounts; esp., the process of recording transactions in the financial records of a business and periodically extracting, sorting, and summarizing the recorded transactions to produce a set of financial records. - Also termed financial accounting. 2. A rendition of an account, either voluntarily or by court order. 0 The term frequently refers to the report of all items of property, income, and expenses prepared by a personal representative, trustee, or guardian and given to heirs, beneficiaries, and the probate court. 3. A legal action to compel a defendant to account for and pay over money owed to the plaintiff but held by the defendant (often the plaintiff's agent); ACCOUNTING FOR PROFITS. - Also termed account render; account. 4. More broadly, an action for the recovery of money for services performed, property sold and delivered, money loaned, or damages for the nonperformance of simple contracts. 9 Such an action is available when the rights of parties will be adequately protected by the payment of money. - Also termed action on account; account; action of book debt. 5. Commercial law. An equitable proceeding for a complete settlement of all partnership affairs, usu. in connection with partner misconduct or with a winding up. See WINDING UP. 6. Secured transactions. A record that (1) is authenticated by a secured party, (2) indicates the aggregate unpaid secured obligation as of a date no more than 35 days before or after the date of the record, and (3) identifies the components of the obligations in reasonable detail. UCC § 9-102(a)(2).

Accounting Research Bulletin.

A publication containing accounting practices recommended by the American Institute of Certified Public Accountants. - Abbr. ARB.

Accounting Series Release

A bulletin providing the Securities and Exchange Commission's requirements for accounting and auditing procedures to be followed in reports filed with that gency. - Abbr. ASR.

Assigned account

see account

Assignment of account

an assignment that gives the assignee the right to funds in an account, usu. To satisfy a debt.

Bank account

see accounts,

Bank-account trust

see totten trust under trust,

Financial Accounting Standards Board

The independent body of accountants responsible for establishing, interpreting, and improving standards for financial accounting and reporting. - Abbr. FASB.

General Accounting Office

The federal agency that provides legal and accounting assistance to Congress, audits and investigates federal programs, and settles certain contract claims against the United States. - Abbr. GAO.

Interest on Lawyers' Trust Accounts

A program that allows a lawyer or law firm to deposit a client's retained funds into an interest-bearing account that designates the interest payments to charitable, law-related purposes, such as providing legal aid to the poor. ( Almost all states have either a voluntary or mandatory IOLTA program. - Abbr. IOLTA.

NOW account

(now). An interest-bearing savings account on which the holder may write checks. - Also termed negotiable-orderof-withdrawal account.

Statement and Account Clause

The clause of the U.S. Constitution requiring the regular publication of the receipts and expenditures of the federal government. U.S. Const. art. 1, § 9, cl. 7.

Suitors' Deposit Account

An account consisting of suitors' fees paid in the Court of Chancery that, by the Chancery Act of 1872, were to be invested in government securities bearing interest at 2% per annum on behalf of the investing suitor, unless the suitor directed otherwise.

T-account

An accounting form shaped like the letter T with the account's name above the horizontal line, debits to the left of the vertical tie, and credits to the right.

account book

A journal in which a business's transactions are recorded. See SHOP BOOKS.

account debtor

A person obligated on an account, chattel paper, or general intangible. * The UCC exempts from the definition of account debtor a person obligated to pay a negotiable instrument, even if the instrument constitutes chattel paper. UCC § 9-105(1)(a).

account executive.

See STOCKBROKER.

account for

To furnish a good reason or convincing explanation for; to explain the cause of. 2. To render a reckoning of (funds held, esp. in trust). 3. To answer for (conduct).

account in trust.

See ACCOUNT.

account party.

The customer in a letter-ofcredit transaction. - Also termed applicant. account payable. See ACCOUNT. account receivable. See ACCOUNT. account render. See ACCOUNTING (3).

account payable

(usu. pl.) An account reflecting a balance owed to a creditor; a debt owed by an enterprise in the normal course of business dealing. - Often shortened to payable. - Also termed note payable. Pl. accounts payable.

account receivable

(usu. pl.) An account reflecting a balance owed by a debtor; a debt owed by a customer to an enterprise for goods or services. - Often shortened to receivable. - Also termed note receivable. Pl. accounts receivable.

account rendered

An account produced by the creditor and presented for the debtor's examination and acceptance.

account rendered.

See ACCOUNT.

account settled.

An account with a paid balance.

account stated.

A balance that parties to a transaction or settlement agree on, either expressly or by implication. 0 The phrase also refers to the agreement itself or to the assent giving rise to the agreement. An account stated is a manifestation of assent by debtor and creditor to a stated sum as an accurate computation of an amount due the creditor." Restatement (Second) of Contracts § 282(1) (1981).If a creditor and a debtor wish to compromise or liquidate a disputed or unliquidated debt, they may do so by either a substituted contract or an accord. If, however, their agreement is in the nature of a computation, it is called an account stated. An account stated, then, is a manifestation of assent by both parties to the stated sum as an accurate computation of the debt." E. Allan Farnsworth, Contracts § 4.24, at 286 (1982). 2. A plaintiff's claim in a suit for such a balance. 3. Equity practice. A defendant's plea in response to an action for an accounting. The defendant states that the balance due on the statement of the account has been discharged and that the defendant holds the plaintiff's release. - Also termed stated account.

account stated. See ACCOUNT.

account statement

See STATEMENT OF ACCOUNT

accountable receipt

A receipt coupled with an obligation.

accountant's lien

The right of an accountant to retain a client's papers until the accountant's fees have been paid.

accountant's lien.

See LIEN,

accountant-client privilege

The protection afforded to a client from an accountant's unauthorized disclosure of materials submitted to or prepared by the accountant.

accounting for profits

An action for equitable relief against a person in a fiduciary relationship to recover profits taken in a breach of the relationship. - Often shortened to accounting. The term accounting, or accounting for profits, is used in several ways. In its most important meaning, it is a restitutionary remedy based upon avoiding unjust enrichment. In this sense it reaches monies owed by a fiduciary or other wrongdoer, including profits produced by property which in equity and good conscience belonged to the plaintiff. It resembles a constructive trust in that tracing may be used to reach profits. But even if tracing fails, the plaintiff may recover a judgment for the profits due from use of his property." Dan B. Dobbs, Law of Remedies § 4.3(5), at 408 (2d ed. 1993).

accounting method

A system for determining income and expenses for tax purposes.

accounting period.

A regular span of time used for accounting purposes; esp., a period used by a taxpayer in determining income and related tax liability.

accounts receivable) and its current liabilities. - Also termed quick ratio; acid-test ratio, quick condemnation

See CONDEMNATION.

accounts-receivable insurance.

Insurance against losses resulting from the insured's inability to collect outstanding accounts receivable because of damage to or destruction of records.

accrual accounting method

An accounting method that records entries of debits and credits when the liability arises, rather than when the income or expense is received or disbursed.

accrual accounting method.

See ACCOUNTING METHOD.

accumulated-aaUustments account

Tax. An item on the books of an S corporation (usu. an equity item on the corporation's balance sheet) to account for taxable-income items passed through to shareholders, such as accumulated earnings - earned before the corporation converted from a C corporation to an S corporation - that would have been distributed as a dividend to the shareholders if the corporation had remained a C corporation. 0 One of the theories underlying the accumulated-adjustments account is that the shareholders should not be permitted to avoid dividend-tax treatment on a corporation's accumulated earnings just because the corporation converts from C status to S status. IRC (26 USCA) § 1368(e)(1). -Abbr. AAA.

accumulated-adjustments account

See ACCOUNT.

action on account

See ACCOUNTING (4).

adjunct account. See ACCOUNT.

aging of accounts

a process of classifying accounts receivable by the time elapsed since the claim came into existence for the purpose of estimating the balance of uncollectible accounts as of a given date.

american accounting association

an organization of accounting practitioners, educators, and students. ( the association, founded in 1916, promotes accounting as an academic discipline by sponsoring research projects and continuing-education seminars. - abbr. aaa.

assigned account

A pledge of an account receivable to a bank or factor as security for a loan.

bank account

A deposit or credit account with a bank, such as a demand, time, savings, or passbook account. UCC § 4-104(a).