TeachMeFinance.com - explain Open Account
Open Account -- Credit extended that is not supported by a note, mortgage, or other formal written evidence of indebtedness.
Open account -- Same as running account, although the term open account is usually employed. In trade (particularly the wholesale trade) when an open account is established the buyer arranges with the seller to receive credit for a certain period on purchases made. He does not give a promissory note or furnish security of any kind, but when the period of credit agreed upon has elapsed after a (after each) purchase he makes payment for it by check or bill of exchange or in whatever way may have been predetermined by the seller and buyer. If the period of credit is exceeded without payment by the buyer the seller is considered to have or perhaps by stipulation has the right to draw on the buyer for the amount due. The name open account also is applied to an account in which some item is not settled between the parties.
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