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In a trust account, retainage is withheld by the owner, placed in a trust account with a trustee that has a fiduciary relationship to the contractor. [26] The trustee can invest the retainage at the contractor's direction, thereby allowing the contractor to "use" the retained funds that normally would sit idle in an escrow account. [26]
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.
DSO ratio = accounts receivable / average sales per day, or DSO ratio = accounts receivable / (annual sales / 365 days) Accounts receivable refers to the outstanding balance of accounts receivable at a point in time here whereas average sales per day is the mean sales computed over some period of time.
In bookkeeping, a general ledger is a bookkeeping ledger in which accounting data are posted from journals and aggregated from subledgers, such as accounts payable, accounts receivable, cash management, fixed assets, purchasing and projects. [1]
Fair market value Accounts Receivable $10 Inventory $5 Accounts payable $6 ----- Total Net assets = $10 + $5 - $6 = $9 In order to acquire company B, company A paid $20. Hence, goodwill would be $11 ($20 − $9).
In double-entry bookkeeping, a sale of merchandise is recorded in the general journal as a debit to cash or accounts receivable and a credit to the sales account. [3] The amount recorded is the actual monetary value of the transaction, not the list price of the merchandise. A discount from list price might be noted if it applies to the sale.
Also excluded are the accounts receivable from bankrupt customers [8] and accounts receivable that are too old [9] – usually over 90 days past due [10] (in some cases over 120 days past due. [11]) Different proportions (or 'advance rates') of accounts receivable and of the inventory are included into borrowing base.
Financial statements display the income and expenditure for the company and a summary of the assets, liabilities, and shareholders' or owners' equity of the company on the date to which the accounts were prepared. Asset, expense, and dividend accounts have normal debit balances (i.e., debiting these types of accounts increases them).
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