Account current – Definition & Meaning

In the world of finance, there are many terms and concepts that can be confusing to those who are not familiar with them. One such term is “account current.” In this article, we will explore the definition and meaning of account current, its origins, and its associations.

Definitions

Account current is a term used in accounting and finance to refer to a running balance of transactions between two parties. It is a record of the financial relationship between two parties, typically a buyer and a seller. It is also known as an open account.

Origin

The term “account current” has its origins in the Latin word “currens,” which means “running.” The term was first used in the 16th century to refer to a running account of transactions between two parties.

Meaning in different dictionaries

According to the Merriam-Webster dictionary, account current is defined as “an account kept by a creditor of debits and credits between himself and a debtor that is subject to frequent changes.” The Oxford English Dictionary defines it as “a statement of transactions between two parties, showing the balance due or owing at any given time.”

Associations

Account current is often associated with trade credit, which is the practice of allowing customers to purchase goods or services on credit. It is also associated with accounts payable and accounts receivable, which are the amounts owed by a business to its suppliers and the amounts owed to a business by its customers, respectively.

Synonyms

Some synonyms of account current include open account, running account, and current account.

Antonyms

Antonyms of account current include closed account and settled account.

The same root words

The root words of account current are “account” and “current.” Account refers to a record of financial transactions, while current refers to something that is happening now or in the present.

Example Sentences

1. The company keeps an account current with its suppliers to track its purchases and payments.
2. The balance on the account current between the buyer and seller is constantly changing as new transactions occur.
3. The company’s accounts payable department is responsible for managing the account current with its suppliers.
4. The seller sent an invoice to the buyer to update the account current with the latest transaction.