Financial Terms Dictionary

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UGMA

Uniform Gifts to Minors Act. UGMA is a custodial account for minors. It allows adult parents to set up an account for minor children to hold assets in the children’s names.

UGMA accounts can hold cash, stocks, and mutual funds. These funds are controlled by the trustee(s) on behalf of the minor. The account converts to the child at the age of majority, typically at age 18.

UGMA accounts are similar to UTMA accounts.

Uncollectible account

An accounts payable or notes payable that is unlikely to be collected from a customer. An uncollectible account is also called a bad debt or a doubtful account.

Unearned revenue

Payment received in advance of providing a good or service. Revenue is recognized when the product or service is provided.

Useful life

Useful life is the typical service life of a fixed asset. For example, a truck may have a 5-year useful life.

UTMA

Uniform Transfers to Minors Act. UTMA is a custodial account for minors. It allows adult parents to set up an account for minor children to hold assets in the children’s names.

UTMA accounts can hold cash, stocks, mutual funds, real property, and real estate. These funds are controlled by the trustee(s) on behalf of the minor. The account converts to the child at the age of majority, typically age 18.

UTMA accounts are similar to UGMA accounts.

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