Accounting


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  Dictionary  »  Letter R  »  restricted accounts

restricted accounts

Accounts that have some restrictions. For example, an investment account and a cash account might be restricted for the construction of a new factory. The restrictions mean that these accounts be reported as a long-term asset, since the funds can only be used for the building and are not available for working capital purposes.


Another example is the restriction of retained earnings. This restriction will prohibit dividends from being declared from the restricted portion.


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