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Home Categories Financial Statements Accounting standards are being implemented to improve the quality of financial information provided by companies. An accounting standard is a set of methods and policies used to systematize accounting and other accounting functions across firms and over time. Accounts payable (AP) represents amounts owed to sellers or suppliers for goods or services received that have not yet been paid for. The accounts payable turnover ratio is a measure of short-term liquidity used to quantify the speed at which a company pays its suppliers. Accounts receivable is the asset account on the balance sheet, which represents the money owed to the company in the short term. Accrual accounting is a method of accounting in which revenue or expenses are recorded at the time of the transaction, and not at the time the payment is received or made. Accruals are required for any income received or expenses incurred for which funds have not yet been exchanged. Accrued expenses are recognized in the books when they are incurred, not when they are paid. Accumulated other comprehensive income (OCI) includes unrealized gains and losses, which are reflected in the equity section of the balance sheet. Adjusting journal entries are used to record transactions that have occurred but have not yet been properly accounted for in accordance with the accrual basis.