The entries shown in Exhibit 5 would be modified as shown in Exhibit 7. Under the liability method, you initially enter unearned revenue in your books as a cash account debit and an unearned revenue account credit. The debit and credit are of the sam... Read more
Since deferred revenues are not considered revenue until they are earned, they are not reported on the income statement. As the income is earned, the liability is decreased and recognized as income. In accounting, unearned revenue is also called defe... Read more
Present value is the concept that states an amount of money today is worth more than that same amount in the future. In other words, money received in the future is not worth as much as an equal amount received today. In other words, present value sh... Read more
A multi-step income statement includes much of the information found in a single-step format, but it makes use of multiple equations to determine the profit, or net income, of a business. Multi-step income statements break down operating expenses and... Read more
Unspent money today could lose value in the future by an implied annual rate due to inflation or the rate of return if the money was invested. The calculation of discounted or present value is extremely important in many financial calculations. For e... Read more
One method is called partial year depreciation, where depreciation is calculated exactly at when assets start service. Simply select "Yes" as an input in order to use partial year depreciation when using the calculator. You will find the depreciation... Read more
Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein. Returning to our cat... Read more
This is important to know for businesses that operate by distributing their products in bulk to other outlets. Check with the laws in your area to ensure you do not unnecessarily charge a sales tax. If your business consists of mostly selling product... Read more
Alternatively, the future value of $3,000 in one year's time equals $3,000 multiplied by 1.10 percent, or $3,300. Another issue with relying on NPV is that it does not provide an overall picture of the present value formula gain or loss of executing... Read more
Your pension liability can be figured out by subtracting the total amount due to retirees from the money you plan on using to make the pension payments. When you acquire a capital lease for an asset, all the rights and ownership transfer to you. For... Read more
