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Q. What is Deferred Incomes?
Deferred incomes are incomes received in advance before supplying goods or services. They represent funds received by a firm for which it has to supply goods or services in future. These funds increase the liquidity of a firm and constitute an important source of short-term finance. However, firms having great demand for its products and services, and those having good reputation in the market can demand deferred incomes.
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APPLICABILIYI OF THE OPERETING CYCLE
Blossom Lawn expects to have total sales next year totaling $15,000,000 and the firm pays taxes at 35% and will owe $300,000 in interest expenses.
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