Entrepreneurship, 6th Edition

Glossary

Accounts payable cycle:

Captures how many days from receiving goods from a vendor until final payment for those goods. There are typically four steps: (1) receive invoice, (2) verify invoice is correct, (3) input invoice into accounting system and obtain necessary approvals, and (4) submit payment.

Accounts receivable cycle:

Captures how many days from delivering product or service until payment is received from customer. There are many steps within that cycle, including submitting an invoice, tracking payment, and following up on late payments.

Accredited Investor:

Under the Securities Act of 1933, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements. The Act provides companies with a number of exemptions. For some of the exemptions, such as rules 505 and 506 of Regulation D, a company may sell its securities to what are known as “accredited investors.” The federal securities laws define the term accredited investor in Rule 501 of Regulation D as:

1. a bank, insurance company, registered investment company, business development company, or small business investment company; an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
2. a charitable organization, corporation, or partnership with assets ...