CHAPTER L. Accounts Current

ACCOUNTS CURRENT

=Definition.=—An account current in its broadest sense is an account of current transactions. In a technical sense, it is an open personal account, one with an outstanding balance. Frequently accounts are allowed to run on between two persons, recording transaction after transaction with partial or full settlement at times but with no intention of closing the account. A principal may have constant dealings with his agent or representative, making periodical payments on account or making remittances to be used as needed by the agent. The agent may make purchases for the account of his principal, paying the bill out of his own funds. He may use in his own transactions any surplus funds of the principal in his possession. An account showing transactions of these various kinds is an account current. The customers’ accounts in brokerage houses and the accounts between banks—banks and their correspondents—are other examples of accounts current.

=Interest on Balances.=—In handling accounts current between banks and in brokerage houses, it is the practice to charge the account with interest on the debit balances and to credit it with interest on the credit balances. It was formerly the practice in some lines of trade to charge interest on all overdue customers’ accounts. Frequently today invoices carry a statement to that effect, although the policy is not often enforced through fear of loss of patronage.

=Joint Venture Accounts.=—In the case of joint ventures discussed in