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Business Glossary


Business Definition for: account analysis
account analysis

way to measure cost behavior. It selects a volume-related cost driver and classifies each account from the accounting records as a variable or fixed cost. The cost accountant then looks at each cost account balance and estimates either the variable cost per unit of cost driver activity or the periodic fixed cost. Account analysis requires a detailed examination of the data, presumably by cost accountants and managers who are familiar with the activities of the company, and the way the company's activities affect costs.

See also engineering analysis , regression analysis , high-low method
account analysis

summary of banking services provided for a business. Account analysis statements are issued periodically, usually monthly. Relevant information reported in the account analysis statement includes the following: the company's average daily balance , average daily balance on uncollected checks, Earnings Credit Rate (ECR) on collected balances, account activity charges, and account balances needed to pay for bank services ( compensating balance ). An analytical tool mostly used in pricing corporate cash management services, account analysis is also used by banks to evaluate profitability of correspondent banking services, such as check clearing, performed for other financial institutions.

Copyright © 2005, 2000, 1995, 1987 by Barron's Educational Series, Inc., Reprinted by arrangement with Publisher.
Copyright c 2006, 2000, 1997, 1993, 1990 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.


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