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The allowance is always shown as a reduction from gross receivables employed to calculate net receivables. Agency fundA fund normally made use of to account for assets held by a government as an agent for folks, private organizations or other governments, and/or other funds. The agency fund also is used to report the assets and liabilities of Internal Revenue Code, Section 457, deferred compensation plans. Advance formulaA provision sometimes utilized in lines of credit as a sublimit on the maximum amount that can be borrowed. Ordinarily, an advance formula limits the amount that can be borrowed beneath a line of credit to the lesser of the amount of the line or some % of accounts receivable collateral. (two) A variety of CMO security that does not pay holders periodic interest in money. It is added to the principal amount due to the holder at a later date. Account debtorAn person or business that is obligated to spend on an account, chattel paper, contract right, or general intangible.
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