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An account sale is a type of financial transaction that is typically recorded on a purchase and sale statement, or P&S. The sale has to do with a change in the position of an investment contract, either in terms of the contract being offset with another contract, or being closed out entirely. The recording of the account sale aids in detailing the history of that account, including all transactions relevant to the ongoing operation of the formal closing of that account.
With an account sale, the commodity broker is recording all the transactions that have to do with that particular transaction. This creates a history of each step involved in the process of that transaction. In many nations, this detail is very important, since the transactions must be conducted in accordance with the laws of the land. Failure to do so could create a situation in which the final outcome of the sale is considered null in void in a court of law.
In terms of the function of the broker with the account sale, the proper recording of each step in the process of completing the transaction also makes it possible to determine the type of commission involved with the sale. The amount of that commission may be impacted by a number of different factors, based on how the account is structured. For example, the generation of a loss rather than a net profit could make a difference. In addition, how the sale impacts the margin extended to the investor may also play a role in determining when and if a commission is collectable.
In many aspects, the account sale itself is not unlike a receipt. This is because data like the price, the contract involved, and the commissions that ultimately apply to that account sale are recorded on the purchase and sale statement, making it possible to quickly review the process and confirm that the transaction is valid. From this perspective, the information about the sale that is found on the P&S statement can be used to validate the transaction when preparing or reviewing tax returns, and other situations in which financial records are under review.
A broader application of the term account sale is often used in sales circles, referring to the establishment of a business account with a new customer. In this scenario, the sale often involves formally recognizing the decision of a customer to enter into a contractual relationship with a vendor for a specified period of time, usually a calendar year or more. The terms of the account sale include the rates extended to the customer along with details regarding any discounts or special services offered as part of the agreement.
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