What is Dilution? Dilution is any portion, regardless of why, of your receivables that you did not collect. This is important as the amount available from your line of credit with the bank is based on your outstanding accounts receivable balance. The bank wants to know the extent to which your receivables are likely to
See also: Does Your Management Team Understand the Financials? General Ledger Reconciliation and Analysis Allowance for Uncollectible Accounts Allowance for Uncollectible Accounts Explained When companies sell products to customers on credit, the customer receives the product and agrees to pay later. The customer’s obligation to pay later is recorded in accounts receivable on the balance
See also: Allowance for Uncollectible Accounts Explained How to Collect Accounts Receivable How to Calculate DSO Accounts Receivable Turnover Another Way To Look At Factoring Dispersion Allowance for Uncollectible Accounts Definition Allowance for uncollectible accounts is a contra asset account on the balance sheet representing accounts receivable the company does not expect to collect. When
Warren Buffet has a saying that goes as follows… “You never know who is swimming naked until the tide goes out”. This past week there have been two major businesses who have been exposed as having been “swimming naked”. The major blow up was the investment manager Bernard Madoff, founder of Bernard L. Madoff Investments
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