TAX PAYABLE METHOD Definition

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TAX PAYABLE METHOD is where the tax expense is equal to the provision for taxes payable in a particular period and deferred income tax is not recognized.

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COLLUSION is a secret agreement between two or more parties to commit fraud or deceit.

COLLECTION PERIOD (Period End) is used to appraise accounts receivable (AR).
This ratio measures the length of time it takes to convert your average sales into cash. This measurement defines the relationship between accounts receivable and cash flow. A longer average collection period requires a higher investment in accounts receivable. A higher investment in accounts receivable means less cash is available to cover cash outflows, such as paying bills. NOTE: Comparing the two COLLECTION PERIOD ratios (Period Average and Period End) suggests the direction in which AR collections are moving, thereby giving an indication as to potential impacts to cash flow.

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