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Although a personal debt is ready for collection, there isn't a assurance the consumer can pay. In addition, the company might not have preferential positioning in bankruptcy or liquidation proceedings. Hence, dollars owed from purchasers just isn't similar to cash equivalents.
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The underside Line Cash and cash equivalents are essentially the most liquid recent property on an organization's balance sheet. The assortment of economic products that comprise the balance of this classification commonly have maturities of ninety times or a lot less, are easily convertible to cash, small hazard, and will have to not have constraints that Restrict their liquidity.
Defense lawyer Andrew Birrell instructed the choose which the bag of cash is “a troubling and upsetting accusation.”