Common use of Restricted Cash Clause in Contracts

Restricted Cash. Restricted cash is cash received in advance from certain customers specifically for the payment of investigator fees relating to specific projects. Such amounts should be segregated from operating cash and offset with the liability to pay these amounts out. Accounts Receivable Accounts receivable are presented in the balance sheet at net realizable value. Net realizable value equals the gross receivable less the allowance for bad debts. Prepaid Expenses Prepaid expenses result from prepaying cash or incurring a liability. Prepaid expenses are presented under current assets even though they are not expected to be converted into cash because the prepaid items would have required the use of current assets if they were not paid in advance.