AVERAGE SETTLEMENT PERIOD is calculated: For Debtors = Trade Debtors X 365 days / Credit Sales
For Creditors = Trade Creditors X 365 days / Credit Purchases.
OFF THE BOOKS is a term associated with transactions which do not appear in any of the financial records kept by a business. Strictly speaking, 'off the books' implies cash payments received for assets (products and services) which are not officially recorded in the accounting system of the business.
TIME PERIOD CONCEPT provides that accounting take place over specific time periods known as fiscal periods. These fiscal periods are of equal length, and are used when measuring the financial progress of a business.
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