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Accounts receivable represents money owed by entities to the firm on the sale of products or services on credit. In most business entities, accounts receivable is typically executed by generating an invoice and either mailing or electronically delivering it to the customer, who, in turn, must pay it within an established timeframe, called credit terms [citation needed] or payment terms.
Retainage is a portion of the agreed upon contract price deliberately withheld until the work is complete to assure that contractor or subcontractor will satisfy its obligations and complete a construction project. [1]
When payment is eventually received, the accrued revenue account is adjusted or removed, and the cash account is increased. Deferred revenue is a liability that represents the future obligation of a deliverer to deliver goods and services, even though the deliverer has already been paid in advance.
In the United States construction industry, contract agreements are usually written to allow the owner to withhold (retain) the final payment to the general contractor as "retainage". [3] The contractor is bound by the contract to complete a list of contract items, called a punch list, in order to receive final payment from the owner.
For financial accounting purposes, accrual accounting generally follows the principle that revenue cannot be recognized until it is earned, even if payment has been received in advance. [7] The specifics of accrual accounting can vary across jurisdictions, though the overarching principle of recognizing revenue and expenses when they are earned ...
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the Receivables conversion period (or "Days sales outstanding") emerges as interval B→D (i.e.being owed cash→collecting cash) Knowledge of any three of these conversion cycles permits derivation of the fourth (leaving aside the operating cycle , which is just the sum of the inventory conversion period and the receivables conversion period .)
General Hospital just bid goodbye to a major character.. During the Friday, Dec. 13 episode, fan-favorite Dex Heller, played by Evan Hofer, met his demise. Dex had been expected to make a full ...