What is increasing income?
ASRED INCOME is a part of the income generated by the sale of goods and services, but the supplier has not yet been received. The term may also apply to any income that is earned because of the investment fund of a type, but the investor has not yet been accepted. In both cases, the income continues to be collected or increased until it is paid in full or according to the agreed date.
As it concerns investment, income accumulates for a period of one or more economic periods and is finally paid to the investor. One example of this type of activity is related to the accumulation of earnings generated by the activities of the mutual fund, which is structured to rewrite investors annually by profitable payments. Throughout the year, income is collected and attributed to the investor. In the date cited in an agreement governing the investment, the Fund administrator will insert the income to the investor's account or prepare a check that the IS by mail to the investor.
The same general approach applies to the accumulated income related to the sale of goods or services. The supplier may conclude a contract with the customer to deliver the cumulative number of units of the product, while the consignments were divided into the same quantity for several months. Rather than remuneration of the payment for each of these shipments, the customer postpones the payment until the total amount is received. At this point, the Supplier charges the customer for a cumulative amount of orders and is waiting for a payment provided in accordance with the contract. Until this payment is received, the nominal invoice value is classified as a accumulated income.
When using the accumulated income model correctly, the supplier is able to accumulate the percentage of income generated for every period of time. This approach helps maintain the balance of internal costs and revenue in synchronization while facilitating monitoring the amount of income generated each individualu with a consignment. For the customer, the ability to postpone the payment until all shipments are completed, allowing you to use these goods over several periods without any type of late commands. This model can be particularly effective in terms of a large number of products, and the products are designed to use the customer's income to settle the invoice in terms of maturity.