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What are funds handling

What is the treatment of funds

Treatment Funds - funds of the company, who are in the sphere of circulation.

They do not participate in the formation of the cost, but are carriers created value.

The structure of current assets

Treatment Funds are included in the structure of working capitalassets of the company. The latter are of themselves the money that had been advanced to ensure the smooth process of production and sales. Along with the treatment of foundations these include production assets. Among them - raw materials, semi-finished products, fuel, instruments of labor and so forth.
The economic analysis uses the concept ofworking capital structure. It represents the ratio between the individual elements (handling funds and production assets) as a percentage of the total. Thus, for example, 2/3 in mechanical working capital is in production and the smaller portion (3.1) - for the scope of circulation.
Among the factors which affect the structurerevolving funds, allocate technical level of production, the degree of specialization (or cooperation) production, the geographical location of the enterprise, material composition and the duration of the production cycle. Also important is the conditions of production and sale of goods movement system, the organization of marketing and sales policy.
Current production assets differ fromTreatment of funds so that they are completely consumed during production and its own costs are transferred to the product. Treatment Funds are not directly involved in the production process and the cost of education, but are its carriers and associated with the circulation of goods process.
Upon completion of the production cycle the cost of working capital of the company shall be compensated in revenue, which is later used again for the organization of the production process.

Classification of treatment fund

In the most general form of two types of treatment funds - is the finished product and the money involved in the company's turnover. The ratio between them is approximately 1: 1.
For the finished product with respect to the fundstreatment include only that which is in warehouses and within specification and that is shipped (is the way). The main difference of this product is that it has not yet been paid by the buyer.
Among the so-called goods in transit are three main groups:
- Goods for which the period has not come oplaty-
- Products on which the overdue Payment with
- Items in custody of the buyer.
The money in this case are only those that are on hand and in bank accounts, as well as being in pending settlements with customers (accounts receivable).
Treatment Funds can be classified and the formation of sources. There are those that are carried out on their own and borrowed funds.
The peculiarities of planning and distinguish normalized nonnormable funds treatment.

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